Structure Money equivalent of utility gains totrade Consumer’s surplus Changes in consumer’s surplus Compensating and equivalentvariations Producer’s surplus

Structure Market equilibrium Quantity tax and equilibrium Tax incidence （税收分担） Deadweight loss （额外净损失）

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

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

Structure Rational constrained choice Computing ordinary demands – Interior solution （内在解） –Corner solution （角点解） – “Kinky” solution Example: Choosing taxes