Intermediate microeconomics

Chapter 3 : Utility

By Lund University

This chapter is based on chapter 4 of Intermediate microeconomics by Hal Varian.

Lectures

Utility function

Demonstration of a utility function with its level curves

Preferences relation from utility function

Different utility functions may represent the same preferences

Cardinal and ordinal utility

Monotonic transformation

Utility function when goods are perfect substitutes

Utility function when goods are perfect complements

Quasi-linear preferences

Cobb-Douglas preferences

Utility functions representing Cobb-Douglas preferences

Marginal utility

MRS and marginal utility