AGEC 21700 Lecture Notes - Lecture 2: Berlin Wall, Indifference Curve
26 Aug 2016
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Consumer preferences are central to how consumers allocate their limited resources to satisfy as many wants as possible. Aim of chapter 2: to investigate how consumer preferences are employed by consumers in making their individual commodity. Places you don"t need economists: heaven, your dreams, garden of eden. Falling of the berlin wall symbolized: decentralized and centralized control. What is demand: how much of a commodity consumers are willing /able to purchase an item at a given price. Pure exchange economy: only agents are consumers, they are initially endowed with some quantities of commodities, there is no production. Conclusion: competitive markets, resulting in an efficient allocation of resources, need no centralized governmental decision process. What is a household: group of individuals sharing income for the purchasing of commodities. What is a commodity: a particular good or service delivered at a certain place and time. Let x represent the quantity of the j commodity a household, j=1,2, ,k.
