Youtubedia
Intermediate microeconomics
Chapter 4
Lectures on choice
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
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
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Chapter 4
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First order condition for optimal choice
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Summary
Interior solution with well-behaved preferences and smooth indifference curves: The optimal choice must satisfy the
first order condition
\[MRS=- \frac{p_1}{p_2}\]