Structure Definition When to provide a public good – Efficient provision – Private provision: free-riding Variable quantities of public good – Efficient amount – Free-riding problem How to provide public goods? Demand revelation

Revealed Preference Analysis Suppose we observe the demands (consumption choices) that a consumer makes for different budgets. This reveals information about the consumer’s preferences. We can use this information to

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

西北农林科技大学：《牛生产学》课程教学课件（打印版）第一章 养牛业在畜牧业经济中的地位、第二章 牛的品种资源

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