DANCEST 303 Lecture Notes - Lecture 33: Partial Derivative, Corn Flakes, Demand Curve
Document Summary
Lecture 2: economics and business (not in the book) Basically, same steps as before, but more thorough discussion and formalization of the. What do you like? part of consumer"s decision problem. What do you like? = preferences (can be illustrated via indifference curves) A consumption bundle is a complete list of quantities for available goods: Here focus on 2-good case (e. g. , bananas (xb) and coconuts (xc) Consumption bundle a is a specific basket: a = (2,5) or a = (2 bananas, 5 coconuts: ordering of consumption bundles by any individual: If bundle a is weakly preferred to bundle b, then: If the individual is indifferent between a and b, then: a ~ b. An indifference curve is a set of bundles that provide equal level of satisfaction for customer. It also shows that regardless of where on curve, person has same level of utility. We are looking for bundles z so that the consumer is indifferent between these and x.
