What Are We Doing in this Chapter? We expand our basic consumer choice framework to include the possibility that consumers can sell something to generate income. Again, in terms of theoretical framework, nothing is new

What Are We Doing in this Chapter? We apply our basic framework of consumer choice to study issues of choices across different time periods; Again, in terms of theoretical framework, not much is new!

The Purpose of this Chapter To begin to understand the art of building an economic model To begin to understand three basic elements of modeling in economics: –Purpose –Simplification through assumptions –Value judgment

Main Issue Mean-Variance Utility Budget Constraints for Risky Assets Measuring Risk Capital Asset Pricing Model

一、经济学的分类 以单个经济单位为考察对象,研究 西微观经济学在价格制度调节下资源如何配置和 收入如何分配的经济学

Duality Given the technology we can obtain the cost function are the cost function contains the same information of the technology (production function)? If the answer is yes, then the cost minimization behavior will indicate the technology of the firm

Contents Inter-temporal preferences Two periods Several periods · Asset market CAPM -APT Complete market Pure arbitrage

CONTENT Wa and demand law From preferences to utility Utility maximization EXpenditure minimization

Preference and Choice Content: Preference and rationality The rule of choice Budget Demand function WAand demanded law

Aggregation and Welfare Content Consumer's surplus Aggregation Representation consumer