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Chapter 3 Demand and Behavior in Markets. Copyright © 2001 Addison Wesley LongmanSlide 3- 2 Figure 3.1 Optimal Consumption Bundle.

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Presentation on theme: "Chapter 3 Demand and Behavior in Markets. Copyright © 2001 Addison Wesley LongmanSlide 3- 2 Figure 3.1 Optimal Consumption Bundle."— Presentation transcript:

1 Chapter 3 Demand and Behavior in Markets

2 Copyright © 2001 Addison Wesley LongmanSlide 3- 2 Figure 3.1 Optimal Consumption Bundle

3 Copyright © 2001 Addison Wesley LongmanSlide 3- 3 Figure 3.2 Income Expansion Path

4 Copyright © 2001 Addison Wesley LongmanSlide 3- 4 Figure 3.3(a) Superior and Inferior Goods

5 Copyright © 2001 Addison Wesley LongmanSlide 3- 5 Figure 3.3(b) Superior and Inferior Goods

6 Copyright © 2001 Addison Wesley LongmanSlide 3- 6 Figure 3.4(a) Income and Tastes

7 Copyright © 2001 Addison Wesley LongmanSlide 3- 7 Figure 3.4(b) Income and Tastes

8 Copyright © 2001 Addison Wesley LongmanSlide 3- 8 Figure 3.5 Varying Prices

9 Copyright © 2001 Addison Wesley LongmanSlide 3- 9 Figure 3.6 Price-Consumption Path

10 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.7 Demand Curve for Good 1

11 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.8(a) Nonconvex Preferences and Demand

12 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.8(b) Nonconvex Preferences and Demand

13 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.9(a) Nonstrictly Convex Indifference Curves and Demand

14 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.9(b) Nonstrictly Convex Indifference Curves and Demand

15 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.10(a) Income Effects, Substitution Effects, and Demand

16 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.10(b) Income Effects, Substitution Effects, and Demand

17 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.11 Compensating for Price Changes

18 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.12 Income and Substitution Effects Work in Opposite Directions

19 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.13 Giffen Good

20 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.14 Deriving Compensated Demand Curves

21 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.15 Plotting Compensated and Uncompensated Demand Curves

22 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.16(a) Compensated Demands of Rats

23 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.16(b) Compensated Demands of Rats

24 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.17 Compensated Demand Function of Rats

25 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.18 Work and Leisure

26 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.19 Income and Crime

27 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.20 The Paradox of Crime Prevention

28 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.21 Elasticity along a Linear Demand Curve

29 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.22(a) Perfectly Elastic and Perfectly Inelastic Demand Curves

30 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.22(b) Perfectly Elastic and Perfectly Inelastic Demand Curves

31 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.23 The Demand for Nintendo Time

32 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.24 The Multiplication Factor

33 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.25 Ordinal Utility Property

34 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.26 Deriving Market Demand from Individual Demand

35 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.27 Derivation of an Expenditure Function

36 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.28(a) Willingness to Pay and Consumer Surplus

37 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.28(b) Willingness to Pay and Consumer Surplus

38 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.29

39 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.30 Supply and Demand Curves for the Experimental Markets

40 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.31 Exact and Approximate Measures of Consumer Surplus

41 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.32 Change in Consumer Surplus

42 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.33 Price Compensating Variation in Income

43 Copyright © 2001 Addison Wesley LongmanSlide Figure 3.34


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