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Lecture 4

ECO204Y1 Lecture Notes - Lecture 4: Sturzkampfgeschwader 2, Utility Model, Utility


Department
Economics
Course Code
ECO204Y1
Professor
Sayed Ajaz Hussain
Lecture
4

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University of Toronto
Department of Economics
ECO 204
2011 - 2012
Sayed Ajaz Hussain
Lecture 4
1
© Sayed Ajaz Hussain, Department of Economics, University of Toronto, STG

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© Sayed Ajaz Hussain, Department of Economics
University of Toronto, STG 2
Model choice of consumption levels of commodities
Physical restrictions on consumption represented in
Typically:     
Assume rational preferences
Assume preferences representable by a utility function
Indifference curve slope    
 




Consumer chooses optimal amounts by UMP:

     

 

   
Typically
   

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Today
Setting up and Solving UMPs in General
Budget Set
Uniform prices, Changes in Pecuniary Variables, Comparative Tax Analysis
Tips on simplifying UMPs
General UMP, Monotone Preferences, Eliminating Boundary Solution(s)
Properties and UMP of Cobb-Douglas Utility Model
Demand and Functions
Comparative Statics
© Sayed Ajaz Hussain, Department of Economics
University of Toronto, STG 3
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