Consumer Choice and Demand

这是一篇关于Production and cost的思维导图，主要包括Types of Firms、Cost and Profit、Production、 Short-Run Production Cost、Long-Run Production Cost。

Chapter Five：Consumer Choice and Demand

• The Consumer's Budget Constraint
  • factors: limited income + the given prices of goods
  • represent: the combinations of good and services that a consumer can purchase with income,at given prices
  • Budget Line
    • Definition
      • a border between those combinations that are affordable and those that are not
    • PxQx+PyQy=I
    • Qy=I/Py-(Px/Py)Qx
    • the absolute value of the slope= the relative price
  • Effect of Change in Income
    • no change in the prices,-Px/Py unchanged
    • an increase in income will shift the budget line parallel to itself to the right
    • a decrease in income will shift the budget line parallel to itself to the left
  • Effect of Change in Price
    • the budget line revolves downward or clockwise
    • the price changes,both slope and intercepts will change
• Utility
  • Definition
    • the level of happiness or satisfaction gained by consumers from consumption of goods or services
  • Total and marginal utility
    • total utility
      • received from consuming a particular quantity of a good
    • marginal utility
      • gained from consuming an additional unit of a good
        • the change in the total utility resulting from the consumption of one additional unit
        • MU=ΔTU/ΔQ
        • the law of diminishing marginal utility
          • the marginal utility generated by additional unit of any good or service diminshed as an individual consumes more of it
  • Diamond-Water Paradox
    • value in use
    • value in exchange
• Consumer Decision Making
  • Utility maximization
    • consumer equilibrium
  • The utility-maximizing Condition
    • MUx/Px=MUy/Py
• Deriving the Demand Curve
  • Individual Demand Curve
  • Market Demand Curve
• Ordinal Utility
  • Definition
    • the consumer can compare the satisfaction derived from different goods or from different units of the same good
  • based on
    • some assumption about preference
      • an individual consumer can rank all the alternatives in order of preference
      • a consumer is better off with having more of a good than less
      • a consumer is presumed to be consistent in his choices between bundles of goods