PPT-Chapter Four Utility Preferences - A Reminder

x y x is preferred strictly to y x y x and y are equally preferred x y x is preferred at least as much as is y p f Preferences A Reminder Completeness For any two bundles x and y it is always possible to state either that . . Ipeirotis. (with . Anindya. . Ghose. and . Beibei. Li). . Leonard N. Stern School of Business. New York University . Towards a Theory Model for Product Search. P.V. . Viswanath. For a First Course in . INvestments. Learning Goals. 2. How do we characterize individuals’ preferences for taking risk?. How do we use utility functions over asset returns?. How do we evaluate investors’ risk preferences?. Household decision-making. Ruth . Tarrant. “The family is a remarkable institution. And a complex one. Indeed, so complex that much of economic theory proceeds as if no such thing exists”. Sen. , A. (1984) . Utility and Choice. . Objective. Build a model to understand how a consumer makes decisions under scarcity.. To understand his choice we need to know:. Preferences. Constraints. Consumer makes a choice that results in the maximum satisfaction or UTILITY.. Household decision-making. Ruth . Tarrant. “The family is a remarkable institution. And a complex one. Indeed, so complex that much of economic theory proceeds as if no such thing exists”. Sen. , A. (1984) . Part I. CONSUMER THEORY. Laura Sochat. Budget constraint I. Income is one of the factors affecting the quantity demanded by consumers. . I like to spend money on food and on clothes. Assume they cost £5/g and £10/unit respectively. Also assume that my weekly income is £200.. 3.1 Consumer Preferences. 3.2 Budget Constraints. 3.3 Consumer Choice. 3.4 Revealed Preference. 3.5 Marginal Utility and Consumer Choice. 3.6 Cost-of-Living Indexes. Consumer Behavior. ●. . theory of consumer behavior . (. Quasiconvex. preferences). L7. Comparative cheap talk (JET 2007). Persuasion by Cheap Talk (AER 2010). Chakraborty. an . Harbaugh. Multidimensional Cheap Talk. Two agents: Sender (S) and Receiver (R) . Chapter 2. 2. Good 1 (. x . 1. ). 0. 20. 25. 50. Good 2 (. x. 2. ). 12. 25. 50. b. a. Unit of Analysis: Consumption Bundles. The . consumption possibility set. Assumptions on consumption . possibility . Highlights. Learning Objectives. Become . familiar with . Indiana Design Manual . IDM . Chapter 104 . Our source document for utility coordination. Understand . Definitions and . codes. Know the . Roles & Responsibilities of the Utility Coordinator. Gail Lee. . Highway Utility Engineer. , INDOT. June 21, 2016. Learning Objectives. Become familiar with . IDM Chapter 104 . –. Our source document for utility coordination. D. efinitions, codes. Roles & Responsibilities. Consumer Choice. Postulate: . an unproved and indemonstrable statement that should be taken for granted: used as an initial premise or underlying hypothesis in a process of . reasoning. Consumer choice postulate: People choose from available options to maximize their well-being (utility).. a Science? . 2. Issues. 3. Economics doesn’t predict well. All its assumptions are wrong. It isn’t even done in good faith. Economics . doesn’t . predict. 4. Three replies:. No . one . predicts . Introduction. Supply and Demand Models (Ch. 2) are useful for analyzing economic questions concerning markets.. How will increasing the real wage affect output?. In these models we summed each individuals demand to obtain the market demand curve..