6. Choice Under Uncertainty a. Representing Uncertainty: Lotteries and Compound Lotteries b. Axioms of Expected Utility C. The Expected Utility Theory d. Empirical Challenges to Expected Utility Theory-the Paradox Business e. Application: Crime and punishment

5. Aggregating Consumers Consumer Heterogeneity and a Discrete good b. The Properties of Aggregate Demand The Existence of a representative Consumer d. Externalities e. The Social Multiplier

4. Welfare Analysis and Other Issues a. Measuring Welfare b. First Order and Second Order Losses C. Taxes and Welfare d. Household Production (did last class) e. The Hedonic Approach

3. Comparative Statics a. Indirect Utility Functions b. Expenditure Functions and duality C. Expenditure Function and Price Indices d. Slutsky via Utility Functions e. Slutsky via Preferences

Structure Describing technologies Production set or technology set Production function Isoquant Marginal product Returns to scale Technical rate of substitution Well-behaved technologies Long run and short run

Structure From Individual to Market DemandFunctions Elasticities Revenue and own-price elasticity ofdemand Marginal revenue and price elasticity

Structure State contingent consumption (依情 形而定的消费） State-contingent budget constraint Preferences under uncertainty Choice under uncertainty Risk aversion Diversification and risk spreading

Structure Economic profit Short-run profit maximization –Comparative statics Long-run profit maximization Profit maximization and returns to scale Revealed profit maximization

Structure When to sell an asset? –Rate-of-return Arbitrage Taxation of asset returns Applications Financial intermediaries

Properties of Demand Functions Comparative statics analysis （比较 静态分析）of ordinary demand functions -- the study of how ordinary demands x1