Microeconomics

Topics: Consumer theory, Preference, Microeconomics / Pages: 6 (1285 words) / Published: Feb 16th, 2012
EC 3101: Microeconomic Analysis II A/P Indranil A/P Indranil Chakraborty

All relevant details on EC3101 are in the syllabus The morning office hours on Tuesday will start from the third week of lectures t tf th thi d k fl t

Important Highlights Important Highlights
• Text book: Intermediate Microeconomics: A modern h approach by Hal R. Varian (8th edition) One midterm and one final exam Please do not email material, lecture or exam related questions. Post your questions precisely on IVLE Forum or ask during office hours. during office hours Read the syllabus very carefully. Please turn off the sounds of your mobiles, laptops and other Please turn off the sounds of your mobiles laptops and other devices during lectures and tutorials.

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What is EC 3101 about? What is EC 3101 about?
• Microeconomic theory is about modeling Microeconomic theory is about modeling individual consumer and firm behavior in a way that allows quantitative analysis th t ll tit ti l i • EC 3101 will be a transition from graphical to g p mathematical analysis, and cover new topics

Breaking the market Breaking the market
• The market consists of
– The demand side – Th The supply side l id – Government

• Demand side consists of consumers Demand side consists of consumers
– Consumer’s choice

• Supply side consists of
– Firm’s choice Firm s choice

Chapter Two
Budget Constraint on Choice Budget Constraint on Choice

See Sections 3.2 (and other relevant chapter 3) from Pindyck and Rubinfeld (6th edition) to recall material from EC2101 before you come to the lecture

Budget Constraints Budget Constraints
• Consumption bundle containing x1 slices of p pizza, x2 cans of coke and so on up to xn units p of commodity n: (x1, x2, … , xn)

• Commodity prices: (p1, p2, … , pn)

Budget Constraints Budget Constraints
• Q: When is a bundle (x1, … , xn) affordable at p prices (p1, … , pn)? (p p) • A: Affordable when p1x1 + + pnxn  m + … + p

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