Econ 3010: Intermediate Price Theory (Microeconomics) Professor Dickinson Appalachian State University Lecture Notes outline—Section 1

Expected Background Material Supply, Demand, and Equilibrium Comparative Static Analysis (shifts in S&D) and elasticities We’ll use minimal calculus that I’ll show you.

Budget Constraint The Budget Line and budget set Changing the budget line Odd budget lines

Preferences and Utility Preference assumptions Representation by Utility functions and indifference curves (examples with graphs) Marginal Utility and MRS

Optimal Consumer Choice Put preferences and constraints together (examples) What if preferences are not strictly convex?

Demand (more on choice) Income Changes  “Income offer” and “Engel” curves Price Changes  “Price offer” and “Demand” curves

Slutsky Equation and Consumer Surplus Slutsky Equation Substitution and income effects Examples of Slutsky decompositions Consumer Surplus