eC A ti ik itd L_Arioms of Rational Choice Nokes > ok Must ao ard og Resumption 1 Compicteness, > wale, dhe Comsumens Gre GbU > capress “pane” gy imdijjeenes - Vehsem avn pokr al laumdles Trot is Be ts mds x and Ys cc consumer sill le able te Soay ior RAY eee, Ascum Pim 22 Tromoitivity Tis 15 0 consithuey mauirmort Pe a consumer - SA says a ib zy ot yo? dn 2>E Enombn ol jrcmsighuey umtd le OY; yoo ord Sram UE A soys Bm 2>% > Viclation of “Tronsi fvity"- Tre ighication ip tho 4th pmfumee curme oy prdilfecnce Cun Commot mkersech- AS Nolet Tey HOY 5g badeye bo Yo v&Y2 0F8)209 imaditfeumes od nm ow um, 4 0Ca)=U(eD =e) gem Yo ds gy alongs Fe Pa] Thun sine BO jmatffawe aA fe UCH)=WOSD , How 200% (HH Hen OB) SUA) fe Conal possibileAssump bows 32 Ratlarcividy A bumdle £15 preferred or mdillot be Usd Yobig > % Bk ensures every land tenon bp “ad Yast” ome och <= Tepicahon of ALP ALTA? i: “Ewng umd can be BHR inka ont ndifteumer oct Ord No move Lom One jmaittenanee sak” i Thre consyep tin bands arc "Now imknsectt Wndi ference SR" funfre ot com alesorys Tank; ommd erpress a Spethic prefrwren orden. Wovd Hearings. Assumption 4 2 Non Strtion Sectiaction = 7 will be preferred tr yi if ABA 03 2 cenlains more cf ea St ees : $ ee al Aey ole Best olga ts Pu were of enth ago it cmtains Wa loiter Pa (Be) This assimptir ollous te dafinr Ya vreve or Liss prfaved nugionSe a v-femgy 3 becouse of Assumptiong, Ad lamas in @) must be prfened t polmt L. Amd all landlts © (SHY ba Atss preferred - Moving bah bunds Im amditlerence ot mask fpr im suspen © oo ® ji ma Wis wewmnt is arty grssibol. —> hay SUlasihuen. Trdifoue Sh 1s move wide thon a sings point. Ue it is sida Hom Some peice mast fat WwW aun @ LH) Hk will Violate The assump Hen, Aissunnplion 53_Continaity Tr graph A amdilfoune v&) Tu@)>uk)] tome AKA AON %D A" Comm sym Aways pufers winx hve ol Comrsynip non Vand es Weak Convery 8 Whe a Sch {5 NOT shictly Gnvex. y Exonslis of Not Strictly Grvex One shasn in Mn diagron. < tobe Hen 9 Gmexity own Soman ne 4 Yorge of Mo TC That to uk) BLA) [ste] vA) < vA) Trt] DmmaAmMmmmmmnonintm er eerormemtsoew oe QoNvEX SET Non GNYEX mom eoSe A eb ee ee ¢ Qn simple uzvas Ba alee of TC ju MRS is aycing dan alamg A TC crating a comvex funchion. fh MRS md Converrity, ORG bat o-t @A) > au= Bax + = ay [atey Tey 40-6) =) 0 = Mz AX + Huy: ay = ~hur dn «= Mug: Ay = _ ey] Mur Om MSY MRS is Atfm& as He —we A Ho slo f TC a 2 das Se)= ee = = Abe == =) MAS Hy ntobinc Notes Prod meoms [MRS Qin 0 Candin amadyeis Yoo So Mas comsumran, eee Bariralinns are Monginal voi he wsiWiy AY fee A wk fw Fa inkion is nstaimet im this ordinal omabysis - Hewes pan Kod dnwa tine of conus foi acto! eee Om aedinal WALA, camel loo Wyte ty” is a strict Saneor} om a cadiral inrmtation. dunce ofS 2°. Ceonsumn is Nob assimud de. Some Hrs Comte ref R as we en oh Ma existence of. Qusei- concavity Mu)Prec} o} Gnwrrty BUR Ao we bao HRS= hby eames gow fanclvon ee ps : ; bara Chery tx Te Conve rity mans 2S < ree of Hw Slag (4 wast be decir MQS= ee Q5= ames aye fl) B.C) _ccoae a APP EIZA ss ty [trntfay t —h [fy web 98) Saeed sh fet Bil : 4y : iPad, “1 GAELS fy fax 7 futebey = & & fat eg day te _ Piha2h tbat hy . ty hh PTAA on eeeNovo: According fo HO foowy ay esumparene PO Ay 70 Pee ORC Ta dinerinte LPS lneoun 2,0 Rie= hi hts, v The berm Mmaraby © Comat bey ar i n Lo F Bofer 2a fs fy MB | ie ae eee f we =a Reems — == (News oe =) A USGhy fmcion is eeoes ow of attaching MMomibens: fs an _censumneds tai Muwenleers — imintace as hw or More, prrfemd ark one punched | Perferemes comes from Yas letreview ve Odosey ne him Constomns Taspen® fe chemeys in jreame, price ead Olin tackys. Notes a eee ek eo Noles Nake $ B Sunclian Is said by Moebrve tromsirnatn AL Kemetic fact hemotanrais cf decree prsnves Wo ocdaa of is ome Wek 5 font eee et walinehip bebuie Jay dl a mercer FGM) =) FY crpements ef 0 fection | [treme bemotion ef 6 Sens of clearest ond He velen of Hot Hnomagascins Gut tion. 4 means deubliny ant, fume hon. X 5 dowloixs * = riod Ff cia onlirdy inowdng on domeingCobb Dowalas Oiity Fumebionst doom (x4) = ay? DM ows a commen oklly deck at Cor quasi creme Fucelsen) SA ond P mateakes plahue Wrprbrce of foo opnds Da cmsurer. > QW is Wreqousus cf Agree (A+A) Pu speral case 4 AtPat 19 Loeanly homosenims ( homogemens of drgre. 4) DT Te jg ve sled od strictly enver DTK firclen is strictly quasin comsame. 2MeS A tm fe v=7 4 ° - 3 wd. = d= 45 a> : ay = eo os DeOke (qa ty?) da + (P% yh ay « = = = . e - LC - EY SO on Rage > vis = dt GD Comerity. QUES _ eS ry (Xo Shily Gower TOMO MHnMOnHnHnnnnnnnnSve eee eee 9 ir) fenfect Suychble ORLY CA Fume Soneak Frew Uy) = ax +PY STL TC fer ts fy one stright Lins, > Pry parketan 7d Qin con be Calentoled® Saitiny UY eayek te a Oneny Constr 5 =D MAS 1S constomd odory Mu Te.(mes is Not Aininicliny) CHa Ayods A x ond Y hepers ch Ma came rebe sade usgnadiss A Hu” quamtihy censured) DO@Giws on “wink” Gor hocke function. > Lircanty Humeqerrons. > TC ts =e slom& oR “weatly" eommcre oat =2 HRS DVonstahic funchan Ulan)= ax+ey MAAS dog duds ont e < rate 4 x o*y. Rav = Adxi pay Crock the Totak quent) ee ie an e => Meg= G) 4 Constond Slope MRS = 5 Canmcxity > 2IQo = 0 4 No chege wm stepe Weakly” conven schPeakect Complements UbUty de ue (him Consmap iow 2ds pie ee exact preperkion. Fnckiond form Ul) =min(opy) = Whe Kod Pome BH DrMEbrs . oo Poa oitiby is given ley fa smatter of tee hoo terms im Hic pawntiusis. Cataty! with ne Beata 'x' pyoyvidis no voli) > MRS ie Not ar oud => Te funchan As Net strictly Carve ah. CES UBL by Davee fection fo fan ore Specred a r=4) Case of mere Gerrrek “Constrt Cs beby ef Subskitutio! delim 2 3 Uled)= 2+ fies, 55] oe Sn x Utmy) = 2nX% roy Bb perfect Substhies Sai> Ulauj=rty WY cobb- Douglas % S°O2 U(ay)> dana ty TT 1 OFF Peers HAHAHAHAHA® Ter fanclin covespmrds b finn varins forms Aegunding Om tw saushhhen ponerater f. foe purfect subshhic = & fixed prepeim P= 6 Bobb - Dengias G=4 Notes ERS may aie A scokt Wha ult, stty fom —% ot approodus © Gs) 05 A HB Y jrourss This Is accep + ; Thies = Tek _ A DIC fr one asad anh ome bad b) > Corse mach a point whe satiated usitty On OD Wak mat with the oth. CS Consumer is sabaled with bal ageds Colss point) A> Tan 1s atquentily’ a eo Lunek Yuk quod icomes Wad - 5) Se eee a er ee i) ee =) Bndls Amrcacts a -arDEShDUtTy Gudgk Lime We Rasible OS. Grswmer hes a oiwn ramcy tno (Aires) ond das a cmstardt price she yg Pa : ; for tise qeeds Px tee < T The oda d Line Hhrefme coil be = & & At Py ST Jas shes a Maus finelin > y= T— ex mye a sh slope CFifp) = ae A Px\ | >It Ry + Prapunbes ¢ D Bow RQ AL paramekvs and varlabls one pon ragelive . Prd max Linh is so by fusible fattodabl sk. @ Bord & Sime. omy Unde mA tine anc bran @ Crrex s Amnage of omy fre pom miu Line is with m We Mme. & Nenemphy? Sime THO mS if ou prin is finite coms cain aay ex ue aman Tor en ee ne ee ee ee ee ee ee—< hy DEW Heocining then LAG) beams Mooi When & consemer lary ogds tok eahorust sotal Prem DM Slane Of BE bums capa to slogr a} Budgck (Wsychic rate of Tradrolg equals & dhe rate ok whick Vasy Con lc tendad Ty mit lac) He of TE = Sem of Grudge Sy Os = — Mvy Py = Moe = es MRS 2 By ry Meda8 mox U=f{(ay) $4. = PXAY he $9) +a[ 2-2-8) for Be = HAR 20 = 3 459m —O 2h =o ga aOu > #5 -a% —O 28 2 7-B&x-Ryro ee > P= Bxr~hy —@ sgh eek ae eee ee eee eeoo ey fy mus. My aie ety S0¢ Soom ee er ee ee Prn® BG) -fays FR) = fay: Fa(QR = fy fn © 2 (AB = tes oy GB) 5 BA =0 Vessian Moya. _ [tan dey 78 he |e buy “5| | ecto [8] = Gea: fou 0)-i( fey By Pe) 4 (Pyne 9) = (HP tag: 8) —(HPy=Py- tan) —(0-Pay Fan) > ea tt Be 0 TEMP MUU UM UMHMOoOHMHnHoTnH Hae eaeUla a tae ae eee eae eee eee Derrvatten cl Deromd fer Cobb Dugas dumchiong VG! = = ae S4- Dat. X+ HY eee ee ~~ DT2- Perey] Fo. A y= fx =O Sa ay a Bey Cm xh yay =o > (id oh y= hy —O 2k = D- Pax-Pyy =O or DD=PeR+RY ——© Fram © wa@® [0+0] aM r= = ye = He — E\Q)re ka=x Px ay = Gas eee os eae aa APY sE)E=§Ae gk a demand function cubshtule @) om @) Q=awX+ Py Y SDA Kt [Oe x | ie ae > Vs tx OD xX — sez ne eee ; a= Sint = Bk] ; ve at eis =a x. Th Gropalies 4 Pais be Shaacvidnd wit) ateak AT of Wis tecane omy Ger % Coma bay 4 gerd 4) =) Domad is —ve sled with magect te priee One ar ee aks Zlodkaly Fresa > Price Bestia is ~ % a aa SE e='e Ge) —®& =e == aa) a zac a THUMM MHNIKMHnHnNnnnnnnnnnnnnnernneeenGp 2 Stree Has facke attpinds ef price mA Gsbet Wenn pe >The dumond 4 ony Command Is a ding volved fume of Pies omd Trume. > damord Gincb are Wemeqenons of digra qyro VE aM Pa oR ome Sim Somme —— Hom Gyaandti by Soe alll nema inch) Ry Tndiseh OHV function Budd WAY dunclien 16 duntud fram cmstimnng Comrshraind wht UBL mooimizabon problem. DA fee ulitity 05 a fimetion ef Normbixd prices. Divet titi ty das fumefian dascribss meen, Predeptndint of markt phnoremener Burk ae BAKE umetion radlct a ceqrer oe opbmigahm ard mrenlak pris. V=E Gy) Cod ephasrk So} pie v=F] rel s Dy (%)} Sone a . sy alco dp dirded raf ox Py 104 f$—— indiref ohtity oF Payette eo) ae DU" dprds of price ord heme prathur Yoon aman ta hy Dalles tr mwshigak effects of change th pris ond Herinel heme om Ye tasumns oad,= & = C-> 2 we had oe ond SS [ae is = UGe gH) P= AQ AO Gia ———_(}} —_ C8) AX ee Sw) > ze } Oo vu es 2 ee ee BB Dea a ee See Uae Y 6 " Sp ax yl S85) Crom © oh @CO2G) Wx oA ae a eeee. a as wa a —— 2 eg ae a= gor ebay ae T4 Se aaa SS aie ~y = Cr) * To qt Hicksian Demm& sulosthuke vb iw [eS ae Ce a, a (12 =~ = ST >a =D Gs)” Ce —— 6) Siwabaty =—— ote (e-——6 POUMMAUMHNNHnnDHANnnnHnHH HHT ianAe Sm This 15 cath Hu Hickam Dewnond Qumac tion. Libidr is alee Umer 8 “ Compensated dewno-d”. Sree has ete ere prison Aree ON ee te ee ee adjusts Fa enprdibint to compemSale fr th efhach of Price henge on saradimee mol ineeme ov oh, Y Px fills s otwra nus pA to-capendahoe Lrvsit-—) Pe wd Gas ane A ot ab i oudgels Ciso-enpndahuas)) fro news dulokine prices (after Px dees) Lath slant evvespendry to dart LESS: A Bad Vn 5 a ns = ae Fe minomuwn expondibar dma Had marines akiltey ie od point 8. Tatadl empamdilus come stem fron He vice Milneent TW iso-erpadibur Line. Arr And td inlue pt ‘ Falls fran My be Ma othed ienplits aduchin toe er Mark rafsus purchasing power who is @& price Aucnase Pro genes o} Wicks Devons Fidkeiam dumond is mat chincetly olsuvalo. omer tt is ag fimehen ef bility (as wal ao pros) 5 Eyes point vwepeants 5 Sud dt duly (od Axflent Mrurls af cnpesaibua) along oo Wyelesten dia, Thur area under tee Hdision dod seprssab, te tat ory Rihrr ,B Expunditune fumchon’ Te capwditwr. quaction aiws WS the gmallist enqumdatune Lee es sad giusy 3 tat meh “4a, adhere a sd Uhwty - Dd Asmrilees hoo Hu enpgerdibre will cog ae “pring” chang ay nugiiand dead of odtuly dog. The Expundibve b ty dono, B=} (Py. 0) To Aen da Ex Rates Function oe subshiule = ae eae Bu bigh Kins) Fron f,® we errs = totes = A 2% Guclin aires Me file D YD furd 8 Re fa.) ord © 5 1% ae aes CG. x) yet Gy ome TT ae a ooo oaeee A Nos ee ST= xa (Ss) ae +fo (ey ee ce S Eee eC ae ie a ae Samo joe Sie aes Bree ef TS = Proper tes A Expect er fog 1. QTM enprdiber fr is B tremoqemeang of dagmer one. Am ath prices. Ted is Aeublig ath He priv Gill precisity dowel. tly value. ch nequind Saferdabins. Pe Gite) Pes — Cra 2, Bepumdtor Gan is New deeuasiny Ym prices. OE Bh 0 3: Bopowdiha Puneien ane Crcame Bey in procs. E(P0) > & BCU) 4 2) Cee v) Oh @ emsumer cmtinuce b Tomy The some bumnbd of eds Pre Ceporditwe rsd svcnence ok a crevesy pate. Because Oe mR de pordes, mm bron od” boo amant His as prita hups ging op — a5 hs uSUly meds Flee! Constantwp Te Shed shick convey af prufewmer inaphies strict Corcavity of Hur eapmretihne funchin is om mittiec sclution to tui problin of er pundi he Winimigelhon fro a Reed Rud of WALKY. Shay Shephar d's Lemna ont Back ke Vicks Bemod Shuplad’S Lemma sens Prod te a fret apyror mubial tp maluiadn fue some ehty, Dud, hee ace eapmdihre werst rremace Cott inne bn mia gust cmeugh te Grape momwtin ok Hu miliat priw Runds. [ Gast approntmokus mans ois only shictly hue] in the Monit. as pric. chap bene b yro Seephards Lemma 18 a appitahan “Enustep Thames! § wt whids says: “AL AL ophmepa” Value, if For Ta panat anvakine of Prpemdibnr far GoW prspe® bm price eteerr aims tae Bsdesien eanend —fimnekimn, at Thad is SEC HY) vo Si oe nen TP PennerVW On dunn ernghs ste Gp” TL Optimum Expenddbun dn. x a a ae ae Recording ty Shapha AS Lemon gpa a0 ate er eg AE y su _ er ean ae a, eC -— es = cll u S| |Fh Indivect Ohbty Fumcion amd Expunditure funcHent Trdind oklily fier can es aohand hy faking inwasion cL Ba Bodo neki. Th Trait odtity fm daived Gr on Cobb-Devgins uckilily by primal problem mies Vee fT op Trg War Duo prelum > gine Yur Some Glo Daas why coun Bypdi br was E=Uet pg | (cS) + =s | = e! = [3 Pas eS I-« . caer ath pg Sart \ \ oe ee eS a=\ abe \— ms eMail eye ease ek “> Us Ef Pe aI e Ieiqed Valor. Ade ae coh [Et ‘| SUES ge ek ed Sy= ay on ae ey : k DPononDnninnnnninrnnnnneneon nm hag noonEES ee sk Th The Farm aren of Denivabios. Mox a St P= +PyY Aamo ond a vity Mr. veet(e, Ry >7) Sees Pe dN Subtty | foto). v1 vt (Kou\s Towlaty; | of | aa Min TB TRY A UFC) oyuas Hicksian din dt ek opioid value | [eee aoe a | | 6 SE—e ae Retell of BHF 0%.9) | ds drind | Re TPndcsin Demme | | eal ity Omes Az Com | | ae dunn Bye aadi he! | “ 9c | Ion (RY Y= Se | pete aeey | | ES le } [(Shadoan’s L ewe) iyBD Grepanism ol Demomb Comms Romo Burckims Shas ao & consumes dushud ow plod quarchese vay 94 ib pra yanies. Olen Otter Hens tlk Grstord- Dilfore bebe dumed cums ais hem whed used WAR eonstatd. gph Moron Teme is Onstak [> [Mansbellien Demand Wak} [Euce F E ae. Ro Brame is cnshd SS) Gores Tt a Wntome vanes SO | LL Fos just & owl \ Consumaos \ jlnwme “varies ml jr $ Pr cre as Wrcksien Demorek | lemstack Pundvey | {ets Jesu Faw {wes ltl Pl Pui Pt Tia Te (HUL9 la PTO ETN PU FTN PHLLE Te ult tla Lc tiawee ee ee ee mee eens keene eee eae eee + >% DT Minslullion Demon 3 1s & — comstech monn) meee dromonQ Camn Dy => Shovs eked of ehomging Poe tail ~) canstond Gk plo a Whale combed pe Ye price cmon | CHO, SThe Conshwk Punchosiny Pose Demodhs js a onoked seal incon dumonk 3 ble Dad : Dy tore “omead Rak Tremnr” gb duped (a5 by Sleceley wh du osu is abe te perches greqol a Rund& "AVS So tte blac Lime gees Tarenyn &Tas Dee covvesprrnds be Yai Grdarh Rarchou por Cansanpli an, Canrae Si 3 Pidcim Dew d is da fn osht fee LEY. Td ts a @ Comsteah meek incom dered @ Vbodk Cosed nak mom is ddind o$5 abiity te be ad Hua, some earl af au. % Mancdballien Armed droits tay Sulsstihilien od \rrcome effects - Dra Dy ord Dec onby mis thelr paspee he wrsions A subchhlin Effect Orky NOPD nnn neid ed i ld A kh Ah A eh A hh Bl Ak hk CD econ amd Susi on Effect. A typiel Aumomd fmekion (Marten) Conds enparcced AS fumeten of all pias anh Dreome. ZL Pe Py a) for a feo eb cou fig Fretton Veeumus a> f (Pes Py, T) Paies ork mone Yur one caogyrors —duk is persomlers oven wsbich Udividuols Lao ne embrel. Cheng in Han panomders ctl stilt with aaibh Har Wat comshnint or2 cause fi crsumer 4d wna diffeuk devas . Tak is it ounll Bapeerd on Ba porhed duals P% 5 aa Ap. > A Monshallian dimad fx is Kemcgemens of Agyea zenro k= ae 4 2 fe a ead a frubich a oO som naw oh om nem is oth d infr in cped - oz oro OMA Some Norse ob eons 6 colic Men mad gea® .Tu elect of o price day mm aperd Amon d RS More compan th meme. Becanse chong ir pre chonges Osa by, a mn oftect ee © Slope ef rondo _ @ Trlreghe of budlgt Moving b neo obtty Chistes wns @ Paving ba wa Do GB Choy in MRS. Tudo it brings fo efecky ® Suvetitvlvon effec ® Tncome, elect Tang Ethecl Sulsstiition Chest” in qpomkhy Bun tf the individual Aare fo choey | wee f stung inthe, UO price = | some LC contmpm |>- pattern arkecatcso equate MRS " | Hu mem rake &. pres A subsittoRm eft Causes more. tp gy be pandrase® as PANidud mows along fh TC. > Fe Normdllued Trom 2 subsiihobion Re QR eck In Hu some dLuc tin, Pie TnPier FOL Trem ok subsititim ekeok uss Tr Oppesit divechia. Reams & price eg Nuade fy choge In Rok income So Conguner canned slaw Mth come irene eetaaoxe | “Bremer Sted coos Trkiier 2% NTO DODD DMNA nee& M Be > Pa 7 ae Se 2 Be seth eh Pe Ave == Sa So ey. woe a Px a a el i ak Py Pr” seem \s5l> re] Tea Pepe — pAUnd standing BT Di als 2-E(x x) Paobal dutivaline 22 > measuns chonye dn 2 doe tr _ P— ehong in Z Liang, yy Costa Thas fee ony chong in Kote Ye AX Rise in © Chonan E (Com bx mascival 64) Y 27, At oe Simalarly far AB giver chomge im Ys thabis dy Tu pasting cheguin 2 v Tam Pas bbl Choe in| Rubs ‘ : : dk=0 Me dhonys earth Y ense 5 2 dew)= 8x Kia y)=0 5 apie er Engen ay Ata) = ae Ae = Be 0% a Mal Buse SACRE CN eA ae ae sa ee >A (ERY) = ax 204 aK ~ 9x with py oF DA(HY) = HAqTYAe = : Cae TAY Sag ee ALY 2 a = 88 ax + R. ay al = ene woe TW Tee Te Te eo TT a ek ee rk er ea re eeeLENE MEME SD TH Slucteky Eqpodion 8 The Motunadivall Recomposition A Price Chasse Comparative Shaic emalysis exzaming the effect of - docrmpesition of He carqemeers variates (Pring ord treme) an tn solulten wales for He endogenous Vantabls (wml) | Priess and meme coil aller Ha cosumplinn pattem ad crag ehe, Bad Yo NEW guontitis yaast satis hy Yu Face. The variables “pric? ad “Pad Tren ft Vans Ee eee Using “Teal Afton Bak os U-LO8) st P2aKBY d= £07.) => Er — BX = PY] Foc ah. p-gx ny 30 >T-8X+RY ——©Taking ua Teta Diffowtnahion 4 the FOCs (020-6) © Bi AL vty dy =) AP be AX a o> Fyn A a Poy ay =D AP +f a GD. Ad = Pare rahe her, thydy —@ (Reaanengingsy fos At + By Ad = AAT. Pup da + Fyy dy ~ AA =A dy =P AX = Py any = HARA) de, ~ oh TL. Metrix bom den ee oy oe am bux ty + Oey Sa nae gh | Selving foe OX using. Crecmecr’S Rare aR ORE ‘) rdf Dnt MGDa eda EAMG YT ee = = 8-5) \d\ AL= eo mon TT TT TT TTT eT TE eea Gt ed a Pf ca (22te be = zAfe Dar a a =Tgieso-<] BA _ AD ZO ee DEE, = a Des WI @ Sine Solving (eo Niscon Chee using Cyeomad’S Qube fellows Some skeps Sush asin, Gee? dPardey=0 Yn eguaia(® 2 yoilasS “0 aie arz= ~42 Dr) (Dd) ewe bat — 2 $= S = 2 = at ot AD) Resumars chong im weal irene 35 ted _ iw yes . Compensn Glens. am tate Ha Sea penditne nomen same), Lorsumer alae ghays in Sama De” : :ora ® Combolndra @M o& WM, yrds - eee 2% | Du Dot ss ae Bee A Dl =p aa =e lee te Aneta Dotvatin of Slublu, G45 he “We dake Be omsheinkt im Yn uly — Préblomn Pe ful EY en pend nbn pcaulRoy Salation af Yun eaperdihne re arte Ao. —— 3 Hits Wor soba a 2 al bot Wa preblms totll Re sot = Ox Pe va 4 Marshallion 2 UNeliston cu tsil} be Sanne + Pero ky Equahen. 2. *(34) <= Slakskey quah wah imorituirket ater eT PO Oro ad rina wl eleThfere Foe 2" we Com rorite Di GSD, 2) Sime im ap hr’ ye givoKen QE (Exgendor fh) ork Expedite is A duvetim of (fx. Py 0) we com unite Bye Dal& TP) = Bu [Pe MCP % OY Se He idably eons De GMD) = yf Pe TO MY Shaphond' Ss Lemme Sa oP OE Oh sos ines = adn 4 204, py Soeeet he shee he el ts Bac sum of tatu effec a> aa pa (Gbps Ela Yu ir coax eSfat QDR, =a ae> The surshhhn elect is abmoys —VO 08 Bong os MRS ig Biminishing, A demas in Pe dau Pa /p Abu Yur ue MRS Gis to © ) Subshllkm E}od > Prin od querlihy ynerce in Oppestt dnver pan Te Irene Q ef PCR EE) duets om te sige A O%pr)- Far Nemal ged (2%50) On wwe, Hae entire, peor eft, Mila Te gubsahen effect roms ‘eo 7 OLDwel RD Rd RT i Be Jost cls es elastic goeesnas ‘se Spens ives’ a pacha Med eas hunt a _ Moasha\lian Demand Clash Oty % Price Rashaty of demand Tics measius pia prepertimate chenge iW duomt BemmdS tm nisamse to aoe dhonge “ the gendls On gum price: a = Sh fe oe A ‘a'r provides cuvendevk voy te | Notes Summanize Lene prope sSporR — | Sometinas abschate vie 4 @ price chonye bey a jeu Wy am eh Wide wriky 4 comomc yends. dosiaty vaws . Trad is Unmerssony nk it io He cenbred coreg ot. mathematically ‘meoreck tas a dive reacts te He Dome ce eee Price elastdby ef tmomd ip re Cotte Yom Ya cased qttlen paradox) 6b £.a4 ms Guomk| WL OND ~ Verte, € com ee a a vy s 1 cand Batic’, Srila top S5-| old 1 ease @n>\ ost dese> Frcome Clostichy of Demo Ts measures de propertiomme change im guawhhy Brrmordnk IM Suspense {2 propertionate chong im icone. he \ <== = Expr =5 PI Ws vdue can BE Argo in wel member. by Bags <0 Tan Hee gen 1 infil Ly Egr 0 Then Pu amd is Nerd W\taiy Phe dorern of Normal oyais UE OC pA Hd ip Necessity Ex A Yad is Luaury, > Cress pre Cleshuhy 4 Demand Wis rercaneg He properente chorge i te Gpamihy cf 1" dimond IM Stopes fr A. prepetimale dv change. Mm prin a. “Yy". ee Pe Ex py = “OP y em PHN nnn nn SY Eaey 20 tan JoR'e of YO Sesh & ExPo C0 Hem Grad Hot Sy? > GophimesB, =ABD RR A A Ak B_Mdbsinn Demand Elastierhy P Compensated Quon Price Clasticshy sf Qenond Masmes Proprtionale. Compensated chonar im qumtily Aumont in seSpowe 4a proper Benak clone. im 2yo0ks Gum pric = Ste Enc pa > OR ee Cross- Price lasted ty of Dem~d scars Hae proper Nenate comprnseieR im quawtity dumand dd IN Aspmse fe ee Mm price of omstlur re. = oe fy So Py a By Pra elaskdly ond Revenne/Exepraibnn, Erm Wiutun Chong ina prtee till imenease /Arenase Ramer [Expraibin deends on SS price clas bicihy. Consumers Eaumdrstae on 2 Arpunds of price ord Guomtily ol 2 3 ReB= Pex AWARD on e ee) es 2 Sin Pac > = Px SPT SpE She ft* Fer Qnelastic deme - 2 Ban won fe o> xy, =k ca ets] ae than [1+ Cap] > G0 — tin lel=fotroas ann BRD Prin ord fe: fe “| Treas, a >OD i : x Fe Elastic domed = poms Ba ve EO Ex 4 tol be 4d ee wl 3 Veins Bun 815, -2,-®@ e [tne] Hn. Gimckion must Re a cand Rare FAL Rulabansiaps among, Demard Slasticitiess (Manshallion ond > Hicksion | From Stotsty Equation we lmnas | Blashoned Wo O%y- Aku 27 Oe ae OPe on. cat" Pe Qe _ Pe 9K x Oe Stee Se ee = om 2 » En. = Erte, — Sp En Loy fees Manghalliay (um compensated) and prick ston (Compensaled) = Cbdicity will be simile if tm condibions heldsFrom Slut ed ——— Eackedy Egan ——> | Ex Cokin Last pace) ¢ OTe shire of Income duokA tem is Smad. CES 4270 @ We meme chastidly of demord Ena is sma be VOmb ‘2" is Qe sigs henct'l _ BH _Raleiionsts h_Elastiviis (Loita my a Ronsbel\ie Thax ane three tuba timsl'ps ©) Vrrscymiy & = Th, Eulr Buorem seys 439) = ~ 4,29) + 9 fy (%9) ig | Ve nck sum of git Hardallion cdastidhes must eaped Lyne Bu Ce, Py. D) = = ZK xu kee aes Ce An = Px. a + Py a 1S offs | ene = Fuori, etna? PS EE + Py Seg * 2 2 dalam nnn none \ Nose Px ic Re 9%a Se 02 RS ah Sty OE EG); D Eng + Er by Ey n.2 =ee Rok 3, There. relator ane ale treo ccs ~Rustrichions®, The Rstactins arc mperd lay Wairas’ Las. trodes) kets Beary & asserting trot the buhlek Gnstreint |: Tsk tha volves of ences dtmmand muist stum 42 Jere. @ Eneyd Agarcaaton $eig6,5 © The prima pal Im ginal equidoriumm Aes The Naasic ting ts thnk ae Lee sap empertihine meet Chorge Diy Gm wer ame’ enya ty amy chorge Saxe of inane. (aloe deta crgundiine Carnet Clongt die to chony. in Price ond) Te grove Pe fins -B be tae He budopk constrarh mf difremcinle ik wi, puepck He Mure. L= Ox X+ PY 2 a? ay BE> te Sex Be for pee ee = ge a UE ea a + yi ay or fear@_Guramot Aga regedion AL This shoes ho cbse in price gd me -zork Stes Br dimond fer al gnds D=RX+PYY 22x, as ; pe Sh Pe BE 4d Se + eye ae NOt 3 Bene Of oR 3 0= BREE F ty na 2) (RD * es ee Git So= Aye 2 We BY es ae: en. SxEag, +$245y Eun, > SS Ege © N > S2°Exey + Sy Eyeg= — S: This equabon shares dud tue ce oe cross price ebestie- ty effect of chomge te Mua price of % om te qpontihy of Y emoumed Ss pestrickd Vrcomn B An budget Consteornt Oun pric ches curnch be totally owutlmed Dy C7055 price efhect. MOnMnRnMOMn nnn ba ll al lalallalade iia GB Applications with Cabo-Darghas Fete uty qr = Manshellian Demm& toas x aL Gan aes aes frie Eleshaty of Demed SS eee Foata= Se eee = ox Cress Pri Elashcily of Dered 5B a fxs Hy Bao w-o Tmeome Elasiaky ae Ena = 35 ee rai Px Shine of geod % iz a a= bP cg= BAS Ahk Show + ry So= =P 1-4»Proat 0} Yrrmogemeity 5O ashe P Lx p* EX, * Cae = Gi) 4 (0) +(4)=0 CRNS=Ls) Prook qf. Engh Aggregation Sx us * Sy Eg =AQ) + Geena = hoo = A CQRS- LAS) Gourmet Ragreaa son Sx Ex. Py * Sy Eye? =a 1) + C-*)-©) === =S_ CRES=LIS) ATMO Rea eeeMt A el il ed ed Role? K md Y one sulshihstes if bet com| Satisty Ai some nee corms manly Consvers jointly fp ashy, BH Sulostrbiles am& Comphumonts Rod pamcils an& blur pamcils ane “parbeet substitu!” fa a puten toe ddvit Cane abo color, Pems ond pomuils ane, “tmmrfct substitvle! . (Todt is gens ond pencils One +e Some degree a sulostituie der each otwr.) Right shoe ond If} shee an” Perheck Compiamanta't Buk cles ond Socks ane “Usuallg connsirad bathe Henle com te tid “imperfect Complement. Hotkematically 7 Whe duns tah Dr = Che Pys D) 9 a do Are cath& substibkes. PF] ose od it a <0 are caMed Gmprronts. Conkinase Yin © Sons 5X MAY ane subshhles | ipa ere ‘Ceogten Hachsion) 5 : : , seca] 29520 Cath Oblety Crates) Prd ane. cob Gross Sulostite i} Fan Akal (Padallt) 3 == DO (with ses8 Nowial Teo Const)Bon emery Rony some > X md Y an comperentd TL able compoasation Chick sien) [Bek Greatiore) SS £o. (ubiity Gwts) Rr& an cathd Gross comprronts i a retell efeck (Hanshallier) errs a 0 ( Nomi Tree Crvkond) la. Loe subesithh MONT UVnnnAnAnnAnnnTonnenReoAreaeeeeeAt al AT Mat li Ma Ad dd fk pd fk cs GS Ggwds com We prodiced lary jmdividvals who tu whale proass is Mmiividualistic Bak @ IN modeen 5 Wn own wllminsy mnagerity ob are producd by co-opeanting®) aprosps of individuals . DU is becuse Sprcdali gation of Imdividuals in pac. of Produckew fpyeuss can ke camied furtur witrin Oo grap thon one Individual Undndaking tu wha prouss. Thorne. Ore conan qouns Of cour fem Hae eon sak. That is ; We. feted outpa fa team used We Sreater | ye Prom th som of cubpats marviduals oer ki, oe alems. (Soperoteg) M. Tig menten A Cocqualin a Individuals 40 predmer a certain oper 1s NOT a aceunate. AiScrmp Bon of a Fiem Ce- opine Hew ata Wstry A towrien pool Aesomners. Ts “Comprrntion moons (+) pesptr ustv lima do gtr Undue & certalan organize tional Structne, omplorgerr , Cettarom rates propihy rights , embircpumme otTH Thanefone Hu Finn! im profirchion ecenerics . Con oho los Patt R ay “classic Mant! is bosicallyy * Entrepreneurial Bia” | & Histowe of Dindtspment of Modan Fivn This erm of “enter “entre premeriat Siew" ane Bomteped nto a darineat drm of areas qation oh producto, om Rome. Sa Har AcomsiNon from dhe foudsd , ODgrEcrioMn ecemamnry of Har ale miadle oges to Pe capitalist mdustriak CUTER) of. lah nd 20 comtordes s an jmpurtant Ale was Plapk lay wektley men stro trad accumulrhl Ain belt trays trai. Wleritann of dowd Oy by bing successful 7 skilled cradtsmamn. Je were ab fo arspmrd to impr tant Aavalepronl= im Avevaspert ooh predaChian echolegun espiiotiy mache pe ox ord ae ee Of Skeom power , by iwows ting, ime S plant" ond * maclajneny"* 5 Qrouping uals bog tnt fatixies ) tak entering into embeds of complorgmact ond fimmed cduschim In odvevnca Sodas. aes of. Manon nano ooRu cumship ch ascels of nr predatiian Predmong BOP 2 and a Vat cneme fae Wuyers cf lavers poser The advert Pe “Conitalist Eater Entrepreneur? Huns Shep d tee ov gard Za Non of te proteiry grap into tot of te Gaseica Fivm. & fr Futter aren abot Yue “Nahas c4 Fon” Se. Wicroeumomiis ay AGED HW Gvovelle on? COnaptee® ef rma edit lees ; I — (Chery bur Newnes The Five) ad 2 ee Pe eensRh. Producten Function. ‘ The firms predvcher function hee pactindar oyoed 5 Q=§ Gob Ns...) Shesg Hu monde Qvraunk of oye aol com We produced Using oNernahwe Compira ions a Ai fen quomblies Of Atfteank impale . The Aral amd acouroens of produrclten funchien Brgue8S gn Kaa lrasid elumenk oh -techmalagey . Chk. proass de convent inputs imto outputs) SE gy pusimteR am rove. guwic keoms im A gma fuoihal contact, fun wh speecfie emyarricnd Onplicanong . Ty Progenlies cf Prodaclso Function Or ould (@) ond pals (23) OL Tun-mgelive © MO wk HO MMM iM ik i i a tttk Le @ Th Lems Praduction tuncion @=fCc2) mast be = Oo a< Pex) (Gta) one tat) cud dere Koo ea ts is wal tp Pa meimen fesille a8 Gegia oh asf) => wefkdet ; Brees > Fie) eee oe © Dieu AssuapHior aliout techmalogy luphies Aitkrrd production fucton with dibewdk propubtes. The frre fer “func onal form’ ork “graphics Shen” Wil chonge woith cleage In Tedlenderge © YW jo Net possible > produce. cutpals wid imp. Thed 15 a “68 ax fos — Leerhetts] 6 Berke Say Olea hom Scie Gon or emergent: © inputs anc imter demand = Thk ig Vy “teptibes fo pale oo te tore all Inpuls f(o,%) -f(Ld=0 [Smid esseieteng]© aMea) ig Hee cmbirroney Atantdadle, e=1y Be> Th 4st aifewtintion of @ with spect BD é aS (t=0» my 1S co Ae mongrel protucdk: of 2). HPs, tse prodmchen cf Q The mongiral profack 8 4P of Molo im We producer of Qs ts ee pate ok talicly Par maximum hesibl cubpel of Q chorgs Im ssemse too an mse Wil! alth Oar Inputs VR Grstet OD we Wes Ma “La af Dinvnishy Rubsen” a Says $ aos E => knpmy re Inpuds Pinch s a if wae onlay 2 Trowage ORL dowd 5 thom “tee aad oral preduction f mang rt production will dianeast- => The Reasmg Labor users taivh CapihO. 8K Ys fixed owky L gees > Maem Shon k Lo owill damn. So aA ond move a pee ee eck hus te usek with Mis will meduce the MP. wT oe rr eee ee ee eenMe The. % na sushichon, 4 MP. YH com We awe oy =v oe ye. > Suk true is "Produc kivi by Fesuplim” | Vhok Sys Hane is aboays one ‘ Input with pesihuc marginad Me product. This clio moms the MP; ow is cheb R ly the Dw eof 2; as wel os 25 Ce 43) = Diriwishing Macyireh Product Tis Omar was introtued bey “Themas Malton. Fosewe Pu Matomebl nota of Mus Ys aun aes = Bro <6 aK ue MR Soa Se Se ee Bus Bh iyo eee. =fix>o C7055 Bk fem Hals ane Qa eens \rpoxs NO) such CendiinsTH SR PreBackion Sock Rum is ated as »whre odhast ene trad is Hines - Thad is. Duk pk “Q” Creme a furelin f *L thine KK Ys teeth bed constr. Bm a gerenrk Cobbb-Deudias protaction br do Vvanieble Ppnk 15 QoA Ae Qa s Tham; She Shecb run ae dimen We dal Ma from Q=EALS rece TTT TET TTT eT eT eh TRE tobh prota of shecrrnn Produc\ken MPs Manginsh prodnot Mes t ab u ee Mp. at 4 mp + aN =0 = MLZ Ar [AP is jnek whiw Ay= 4? |