Intermediate microeconomics

Chapter 4 : Choice and demand

By Lund University

This chapter is based on chapter 5 and 6 of Intermediate microeconomics by Hal Varian.

Lectures on choice

Based on chapter 5 of Intermediate microeconomics:

Optimal choice

Unique optimal choice

First order condition for optimal choice

Mathematical formulation of optimal choice and the Lagrangian

Three strategies for finding the optimal choice

Optimal choice when preferences are not well behaved

Optimal choice for discrete goods and quasi linear preferences

Optimal choice for Cobb-Douglas preferences

Lectures on demand

Based on chapter 6 of Intermediate microeconomics:

Demand functions and their dependence on income

Income offer curve and Engel curve

Homothetic preferences

Homogenous of degree 1

Examples of homothetic preferences

Homothetic preferences: results

Demand with quasilinear preferences

Demand functions and their dependence on price

Demand for discrete goods