Where Are We in the Course? We are studying the 1st of the three blocks of microeconomics: Consumer behavior, production theory, and market equilibrium Within the 1st block, we are working on the 2nd of the three components: choice set, preference, and consumer demand
Where Are W e Doing in This Chapter? After modeling consumers' choice set and his preference (represented by utility functions), we now put them together and model how he/she makes optimal choice. In mathematical terms, this is constrained maximization problem; In economics, this is rational choice problem