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

Chapter 3

Demand and Behaviorin Markets

Copyright © 2001 Addison Wesley Longman

Slide 3- 2

Figure 3.1 Optimal Consumption Bundle


Slide 3- 3

Figure 3.2 Income Expansion Path


Slide 3- 4

Figure 3.3(a) Superior and Inferior Goods


Slide 3- 5

Figure 3.3(b) Superior and Inferior Goods


Slide 3- 6

Figure 3.4(a) Income and Tastes


Slide 3- 7

Figure 3.4(b) Income and Tastes


Slide 3- 8

Figure 3.5 Varying Prices


Slide 3- 9

Figure 3.6 Price-Consumption Path


Slide 3- 10

Figure 3.7 Demand Curve for Good 1


Slide 3- 11

Figure 3.8(a) Nonconvex Preferences and Demand


Slide 3- 12

Figure 3.8(b) Nonconvex Preferences and Demand


Slide 3- 13

Figure 3.9(a) Nonstrictly Convex Indifference Curves and Demand


Slide 3- 14

Figure 3.9(b) Nonstrictly Convex Indifference Curves and Demand


Slide 3- 15

Figure 3.10(a) Income Effects, Substitution Effects, and Demand


Slide 3- 16

Figure 3.10(b) Income Effects, Substitution Effects, and Demand


Slide 3- 17

Figure 3.11 Compensating

for Price Changes


Slide 3- 18

Figure 3.12 Income and Substitution Effects Work in Opposite Directions


Slide 3- 19

Figure 3.13 Giffen Good


Slide 3- 20

Figure 3.14 Deriving Compensated Demand Curves


Slide 3- 21

Figure 3.15 Plotting Compensated and Uncompensated Demand Curves


Slide 3- 22

Figure 3.16(a) Compensated Demands of Rats


Slide 3- 23

Figure 3.16(b) Compensated Demands of Rats


Slide 3- 24

Figure 3.17 Compensated Demand Function of Rats


Slide 3- 25

Figure 3.18 Work and Leisure


Slide 3- 26

Figure 3.19 Income and Crime


Slide 3- 27

Figure 3.20 The Paradox of Crime Prevention


Slide 3- 28

Figure 3.21 Elasticity along a Linear Demand Curve


Slide 3- 29

Figure 3.22(a) Perfectly Elastic and Perfectly Inelastic Demand Curves


Slide 3- 30

Figure 3.22(b) Perfectly Elastic and Perfectly Inelastic Demand Curves


Slide 3- 31

Figure 3.23 The Demand for Nintendo Time


Slide 3- 32

Figure 3.24 The Multiplication Factor


Slide 3- 33

Figure 3.25 Ordinal Utility Property


Slide 3- 34

Figure 3.26 Deriving Market Demand from Individual Demand


Slide 3- 35

Figure 3.27 Derivation of an Expenditure Function


Slide 3- 36

Figure 3.28(a) Willingness to Pay and Consumer Surplus


Slide 3- 37

Figure 3.28(b) Willingness to Pay and Consumer Surplus


Slide 3- 38

Figure 3.29


Slide 3- 39

Figure 3.30 Supply and Demand Curves for the Experimental Markets


Slide 3- 40

Figure 3.31 Exact and Approximate Measures of Consumer Surplus


Slide 3- 41

Figure 3.32 Change in Consumer Surplus


Slide 3- 42

Figure 3.33 Price Compensating Variation in Income


Slide 3- 43

Figure 3.34

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

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