Lex Service plc
01.29.2013
Economia
Important download the whole lecture from the website
Theory of consumer behavior-
Need to define the agents goals and limitations if any in their ability to achieve those goals. We will deal with a particular set of assumptions but we can modify them in a numer of
Goals:
Utility or satisfaction that the consumer have. The utility fuction measures the amount of satisfaction that the individual get from the consumption.
Consumer Theory- the satisfaction or well being of an activity
Utility function example f( good, services)
2 types of utilities:
cardinal utility-is theoerical
Ordinal utility-
Compare level of satisfaction between two people- cannot be done.
Consumer surveys would like to be able to measure satisfactuin using a measure of cardinal utility
Marginal Utility- the added utility derived from increasing consumption of a particular product by one unit holding the consumption of all other goods service constant.
Mux=
Most marginal utility for each dollar spending.
Lecture 2 is not on the website yet
This concept of analyzing goals at the margin something we will use throughout this course.
Added satisfaction= marginal utility
As the price increase the quantity demanded decreases
The utility that we have from the first unit decreases with more units.
Consumer Choice- the decision to consume a product depends on the relative utility of other products that are available to consume. in other we substitute
(Marginal Rate of Substitution) Slope of indifference curve= the amount of a product that must be substitute for another if utility is to remain unchanged. The ratio is the marginal rate of substitution.
The MRS is the slope of the indifference curve at a certain point.
I spend my money on the product that gave the most marginal utility.
Ex: How much X do I have to give to get an extra unit of Y ?
Example of indifference curves= If my MRS does not depend on
Economia
Important download the whole lecture from the website
Theory of consumer behavior-
Need to define the agents goals and limitations if any in their ability to achieve those goals. We will deal with a particular set of assumptions but we can modify them in a numer of
Goals:
Utility or satisfaction that the consumer have. The utility fuction measures the amount of satisfaction that the individual get from the consumption.
Consumer Theory- the satisfaction or well being of an activity
Utility function example f( good, services)
2 types of utilities:
cardinal utility-is theoerical
Ordinal utility-
Compare level of satisfaction between two people- cannot be done.
Consumer surveys would like to be able to measure satisfactuin using a measure of cardinal utility
Marginal Utility- the added utility derived from increasing consumption of a particular product by one unit holding the consumption of all other goods service constant.
Mux=
Most marginal utility for each dollar spending.
Lecture 2 is not on the website yet
This concept of analyzing goals at the margin something we will use throughout this course.
Added satisfaction= marginal utility
As the price increase the quantity demanded decreases
The utility that we have from the first unit decreases with more units.
Consumer Choice- the decision to consume a product depends on the relative utility of other products that are available to consume. in other we substitute
(Marginal Rate of Substitution) Slope of indifference curve= the amount of a product that must be substitute for another if utility is to remain unchanged. The ratio is the marginal rate of substitution.
The MRS is the slope of the indifference curve at a certain point.
I spend my money on the product that gave the most marginal utility.
Ex: How much X do I have to give to get an extra unit of Y ?
Example of indifference curves= If my MRS does not depend on