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 Is the Question of the Chapter? Suppose we observe a collection of a consumer's choices, can we discover his/her preference? Is this possible at all?fso, under what conditions is this possible? (This is the reverse question of finding the optimal choice)
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
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