Tuesday, April 1 | Review of Consumer Theory

Chapter 1

1.1 The “Good 1 - Good 2” Choice Space

1.2 The Budget Set

1.3 The Geometry of the Budget Line

1.4 Preferences and Indifference Curves

1.5 Monotonicity

1.6 Convexity

1.7 Utility Functions

1.8 Transforming and Normalizing Utility Functions

1.9 Perfect Substitutes

1.10 The Cobb-Douglas Utility Function

1.11 The CES Utility Function

1.12 Quasilinear Utility Functions

1.13 Defining “Optimal Choice”

1.14 The “Gravitational Pull” Toward Optimality

1.15 Optimal Choices Characterized by a Tangency Condition

1.16 Corner Solutions

1.17 Solutions at Kinks

1.18 The Lagrange Method of Finding an Optimal Bundle

1.19 Demand Functions

1.20 Demand Functions for Cobb-Douglas Utility Functions

1.21 Demand Curves

1.22 Summary