Chapter organization Introduction The Concept of Comparative Advantage A One-Factor Economy Trade in a One-Factor World Comparative Advantage with Many Goods Adding Transport Costs and Nontraded Goods Summary

Structure From Individual to Market Demand Functions Elasticities Revenue and ownprice- elasticity of demand Marginal revenue and price elasticity

Structure The cost minimization problem Average costs Returns to scale and total and average costs Short run and long run costs

Structure Utility function(效用函数) Definition Monotonic transformation(单调转换) Examples of utility functions and their indifference curves Marginal utility(边际效用) Marginal rate of substitution边际替代率 MRS after monotonic transformation

Structure Money equivalent of utility gains to trade Consumer's' surplus Changes in consumer's' surplus Compensating and equivalent variations Producer's' surplus

Structure Endowments(禀赋) Budget constraints with endowments Net demands -Price offer curve Example: Labor supply Comparative statics Slutsky equation revisited

Structure When to sell an asset? -rate-of -return- Arbitrage Taxation of asset returns Depletable resources Financial intermediaries

Structure Describe budget constraint -Algebra Graph Describe changes in budget constraint Government programs and budget constraints on- -linear budget lines

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

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