Contents Describe preferences Indifference curves Well-behaved preferences Marginal rate of substitution

Contents Describe budget constraint –Algebra –Graph Describe changes in budget constraint Government programs and budget constraints Non-linear budget lines

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

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

Chapter Six Monopoly : Market Power 垄断：市场力 Chapter 7 Monopolistic Competition (垄断竞争市场) Chapter 8 Oligopoly (寡头市场) Chapter 9 Game Theory

Structure Present and future values Intertemporal budget constraint Preferences for intertemporal consumption Intertemporal choice Comparative statics Valuing securities

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