Structure Describe preferences Indifference curves(无差异曲线) Well- behaved preferences Marginal rate of substitution(边际替代率)

The Theory of Economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine. an apparatus of the mind, a technique of thinking which helps its possessor to draw correct conclusions John Maynard Keynes

Information in Competitive Markets In purely competitive markets all agents are fully informed about traded commodities and other aspects of the market. What about markets for medical services, or insurance, or used cars?

Effects of a Price Change What happens when a commodity's price decreases? Substitution effect(替代效应):the commodity is relatively cheaper, so consumers substitute it for now relatively more expensive other commodities

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

• Perfect Bayesian Equilibrium • Signaling Games • Applications – Job market signaling game – Cheap talk game – Investment financing – Wage bargaining – Reputation and cooperation

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