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Lecture 1

Lecture 1

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Published by Sudhi Adiyodi

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Published by: Sudhi Adiyodi on Jun 26, 2011
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10/26/2013

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Lecture 1Consumer Preferences
1. What’s Microeconomics about?2. The consumer choice problem3. Consumer preferences4. Utility Function5. Consumer Constraints
 
1. What’s Microeconomics about?
Economics? - - - allocation of scarce resourcesMicroeconomics? - - Allocation of scarce resources at “individual”level
 Consumer 
Producer 
2. Consumer choice problem
Individual decision problem1. there is a set of mutually exclusive alternatives2. one alternative must be chosen
 
1+2= ALLOCATION OF SCARCE RESOURCES
-
ex: limited amount of money to be spent on differentbundles of goods
-
ex: limited amount of time to be spent on differentactivitiesQUESTION: How do individual choose a given alternative among allmutual exclusive alternative?ANSWER: to answer this question we need to contruct a theory of consumer choice…

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