60
- nuffitr)s ffo\onq (t\\\cns n €xcrnrgc, coDs\^vnF,\Er), flodtctlcD f d\sffi0\.\t\cn Ord uJrr\t \< itl? eLr\ccxnasT \t rs q 30C\c\ Sdtglqq; 'AeUrCd <rrrrias *po\c\ rnq€tncjr .c Sc\err@. bffilJGg h'\s ttrpCre$cd. maJhodiear op?roacn ta €xpc\lNft co,us-Q- taGR3rf ^ 0gcailOtscr\S o€ o. Er€hofnAt\tr) $\C $N'eS o u\c\r{ to trecost t prcx\\c=\ '\,\iocn{-g ok g(r\c\-tlE\cn ficc or ccuNe-leFfi3c* cx- re\ccddlshiP o.erarrOrnenoo. 'ReQiicctnq c\ Slvfcnsrcn \s cc\iloA o. r cde\ , ure u.se \C{4fe[S\Ye \,$\S (Sucvt Gs pfqo\S rnc$trWjrfll\e].! r/.G\eK) kmttt4rrtfl CqI SS\evncN\e drQtonCttrcnl = u\Q Nont to Ssnp\q thO rssr,r.O ct hCrd iOGQytO tr\L eef',n\L\en of t\\Q. stc\e\y\Zf\t b,\ r.c\..ng Ost"wFtfrc . \ ofYcft M€frEnsros >o.Q\Oee bJnOFe p\IqS\ +g.,\CFS Cocne to Rr$rrZr 15 erl\,\ets- $Oxril df\q sct\\Sc\rcrr /r.t\1S51 "Uq crgr*nrg g$dstsew\ces bL\t Wloq CrQ s"tlo\€-c\ad tD " cllCeet CcfrStO\f*;tnaq prcRet r6-\cFe to\e\ 0(1d'dd\incn cr\ un\ts o,.do tc.frmin-sirr ng so*\sfc-\ct\on lsctttsFct_nl >e squcfi\t\ so ct!\d cr-(ks[ < (\ @ pc\t\f€ *\ ltrrg{OrK- Ch r -r'?., f@c}l. ouchCn\ \S ECo.0^n\CS: - wrcr\1 - ffrA\nq a ir0ll tc scr(sft ouf nofits - c.'"^C\eS, rDr,c ro deoJ. dirtn rt. \a o\ a.\r) (Rf:Jr detrvcrr\r.w) 1.qa1^rrrA .{<rt s.tctf\V? .I

Microeconomic Theory Lecture Notes

Embed Size (px)

DESCRIPTION

Lecture notes for Microeconomic Theory at Northeastern University.Disclaimer: I do not claim responsibility for these notes in any way, nor do I claim these are my notes.

Citation preview

Page 1: Microeconomic Theory Lecture Notes

- nuffitr)s ffo\onq (t\\\cns n €xcrnrgc, coDs\^vnF,\Er),flodtctlcD f d\sffi0\.\t\cn Ord uJrr\t \< itl? eLr\ccxnasT

\t rs q 30C\c\ Sdtglqq;

'AeUrCd <rrrrias *po\c\ rnq€tncjr.c Sc\err@. bffilJGg h'\s ttrpCre$cd.

maJhodiear op?roacn ta €xpc\lNftco,us-Q- taGR3rf

^ 0gcailOtscr\S o€ o. Er€hofnAt\tr)$\C $N'eS o u\c\r{ to trecost t prcx\\c=\

'\,\iocn{-gok

g(r\c\-tlE\cn ficc or ccuNe-leFfi3c* cx- re\ccddlshiPo.erarrOrnenoo.

'ReQiicctnq c\ Slvfcnsrcn \s cc\iloA o. r cde\ , ure u.se\C{4fe[S\Ye \,$\S (Sucvt Gs pfqo\S rnc$trWjrfll\e].! r/.G\eK)kmttt4rrtfl CqI SS\evncN\e drQtonCttrcnl

= u\Q Nont to Ssnp\q thO rssr,r.O ct hCrd iOGQytO tr\Leef',n\L\en of t\\Q. stc\e\y\Zf\t b,\ r.c\..ng Ost"wFtfrc

. \ ofYcft M€frEnsros>o.Q\Oee bJnOFe p\IqS\ +g.,\CFS Cocne to Rr$rrZr

15 erl\,\ets- $Oxril df\q sct\\Sc\rcrr /r.t\1S51 "Uq crgr*nrgg$dstsew\ces bL\t Wloq CrQ s"tlo\€-c\ad tD "cllCeet CcfrStO\f*;tnaq prcRet r6-\cFe to\e\0(1d'dd\incn cr\ un\ts o,.do tc.frmin-sirr ngso*\sfc-\ct\on

lsctttsFct_nl >esqucfi\t\so ct!\d cr-(ks[ < (\

@pc\t\f€ *\ltrrg{OrK- Ch r -r'?., f@c}l.

ouchCn\ \S ECo.0^n\CS:- wrcr\1- ffrA\nq a ir0ll tc scr(sft ouf nofits- c.'"^C\eS, rDr,c ro deoJ. dirtn rt.

\a o\ a.\r)

(Rf:Jr detrvcrr\r.w)

1.qa1^rrrA .{<rt s.tctf\V? .I

Page 2: Microeconomic Theory Lecture Notes

P

t\Uq pv\rsuL tY\O\f

wqrYl6/ti'nc-

0uJft rft\S€s\

D€fcgt"\r- tho qv.ocftifle\. demcTffd c\t dFFercJ\rvires

-' equ\\\Dr\uml rnoc\e\ c\croc{-€' fllcr<ft\ Sr qj-S

t\

fispc\ctk0ftrm- oettg\no qoufse o\ o. cettcri^ tosKisSguffs- rNcft\ to rrclttrt ''-tz€

protr\S, btttae SL{rJFC}€D ioWU- Oi.:oltAklmq €'tesou$cGs ft\ owV-l- \\nn-\-tcK\cr

ftd$rt= tc'tilteXenuA- - btcrLctG\\___.-...v_-/

A\rE$i\x otlsoqp xgwf,ttiYfticd totcrLftSr

SefUIS \rc$\\ ttl W*rntze Lru gaP

;.t!\a_ dg'nrd + s\m\ltfl,p

\s

C[{\€-

suPE1

sup\\ rs tY1q qugo\tflessr\pPlied c*- oieFef,(Jft+Qf,\ces

\3-qs'

q\Isp\us

llltt0

Page 3: Microeconomic Theory Lecture Notes

>r40-\€\ €\\\$eses occuf

;l dct M€cctrf\'sns'-L!.R\\oooflCq €uSCeS tI) tre\(- Cep€C$V€ us,s

EQROEN\,* SssurnQl|\GtS'. runO moNg\ RL\\NeS

c no sO\\ cNrees loGecno.L\\€st,no rnq\oPo\\ac(ig\4, FetQQC\ t futr \nQbcr^os\o^ €tcro

pvefo$\€f,)ts acrrlzs \fto ptcrq - tyra\r ob)ec\\ves \stotrgx\fn\ze uJe\f. be\ng oe soc\efqtc\qzecE

Page 4: Microeconomic Theory Lecture Notes

Micrmccl^nrn\c Tvrrv

Lsctr {€ t!.

s< 6lttmq-

\5. O\. sOrO

fuqers hcwa {lilA\\or\OAs ot \tncvlt{, *

" \n th0 qbse0C€ oe rro** Qa\\\fes / vvlarfet vy\ed(U\\y\. cl\strr tx,ttfQsorcces eeQqerr\\q / rv\Qcn\nq wbs \y\z Nqhas\ €Ue\ o€totr'.\ sai\secerc(I\ '\\ oc \eveo ,rindec aftcan\og,NoPi\cn\

S

ftt ODi\huvn (P*Orn Oi) ,ttrt tOStUriF5n1d' vq\\r qeltus€ sNisqcc\tcn fl\ot\\

D Qquil to'ttr.0. C0S\ 0e pf0d$Ci\oA.

0s\Nng\c4\s E{rect $t'()tw[l\cn f\co' Qer$ect 0c\Nfprt\\onse\t \ffietQsf '

acOnofn\( rcrt\oyuJ"\

'\$effigrinq n\\ 't!\[ t.tr\r[$ \\Qc\0$t\\\AS:>pnce q&I- r ce\\\ngs rpr\ce crrttc\ =ce\trrr{r)+tqxes

. Dor\Aorw i(\aof func\oN [q.mx+b;- P= S- '/s So crolfQ\e)

, Sumyit11x1t $mc\oo (\=tr'xtb)-. Pt3*'/20"->\t$\gr\, qOu0.\A tlrd t{IA- aqu\\U\Lu/vl f{\(e tQucrAtiry

d--a8-'/s&Pb=g * )!G=

.'at-'/3q"= 3t/zQs P= 3t'/z[3C)= q5-^ y2s3i'/300 f= Rs

= 6tts) = q$"t3S= 6€5) = SQr

3c=Gt

Page 5: Microeconomic Theory Lecture Notes

P

f,r9nce .

ce\NrS

oirp\cc ae\\fKl sl].6d= 8\ -S( \))

; !'\-36=\t

6,'= 6+ Xt2)'30

uou see 0. Shcrtqoe' O"> G"= \S-3d =Emr\s

hr<r1 Ot

$Qcr P'

Glurnz

ba

QlLeme

h\ce Cert\ng posrcrJ c* SO,btrttf\o(€ K qmefr sld\fltr,$\J\a FcP\e ef,vlo'\nn?eg€tfP_ Ce\\$q ngJ)d YcrogtpSnO u:crtls -b CSJC€ t{lzso(Ilc{eP.

'S[oic$\ " Cho\ce+t\fne (fiG Yf,.ace\, \nccrne+ QOSCUTCGS: IObQf [l-rUrnCn Cqp$c\)

ePlto\ (pufit t eQt\$Y€nt)'uofYl * ffiturO\ rescl-}.fces\e$res\ena-\i!t$i\Prttacnno\cQ\J l*^*

(QSCI)Jce3

scc\ce \e $\qrq isSt effr,p;Y

Crrxset+ ggcttrnrttt

t cp6crfucl\ Qeat: \$rc\trqou gpruquQ os tns No6er QVorcQ tc obTCA$ t\rstr on6re

'$scorc$q- o. (ccufQ€ \s

Qr\<rit\ze

Page 6: Microeconomic Theory Lecture Notes

!D\rcfeos4)

/',t\,\A q{,cctrm\ acsf ce Ccxfrng ta C\CJSS \s maCtSU{ad ht-1

uqnc\t\S g\\ven uPrlve s\€€P

cnotrCIrr\ ccst' tgicOuctrcrr Fss\ro\\\t\6)rcSotttce I q6fcrfic tcoracnk

t \AY\Qqf cfA\^I \L- r8O-t \-18-5 \13-r3 160-56 \3\-s E\-8\ o

NrffJ

t\6r\5\\5-t\5t\5*\5

\530\56015-PP qO Fd(a\\oc\ F."=SI,,G

Rcrft\e(

mo{e \$tdJfesourc€s

Q EG['O\,NC. DE!- rrvr$0U\$^rn O. QOlrCOrrtO,gqn

aoCAdS * sctt ifi\et€$-C$'StOfrt {SSOus() 0rr\3i-i^ -\€cnno\ociv dcI'S fio\ crN\qsfuu urrtirdsto.\ (t {QSc\\fcP-

OrqpasaQG

\J

alQ C0rrc\tS\ccrs,o:corcr\ cous€s oltcrurnrru cost(} Fcrxau$ocr cOuses \nCt€CS\ng cP?ef,h.,(Cl\qcext

okesbrtittcs tcn\er 0\va\ US 0Jlt(LccrrltbtV\C,tt\cn cF

trquns v."r.Dc^.oe eRrcrdrt cil.1r$n-afe cr\ cna cu.tv€:rry\ete tQu qqdePefds cn tna tCS\€St P\eel3KJ

cFcpr-rr crsuwrQ.!-=qpucunf\{i\ be ousKp t\10 curvQ= \or"tgqg bQ \t\S\dQ th-acutv(, \t\sccUtocl o!$prt

c\f OUrUA

n,Ecrnffrc QsorNh eqL\ss DrQ-QPF o*\Md

rr\ tV\a_UlSq tY\\nq\

$N^e NQJJ. v]elnq

'tltffi: in n's{nd= o( cn*cfi

Page 7: Microeconomic Theory Lecture Notes

.CInsuynqf RerOUCr ond USIJVUT obrqctu/o-> ry\o gqEq\I9l.s,y\Yn\crng s,rt frcvn crsu\\\\Ng

to$Nrr {B >o

,tCIds.u se\\\cQs" * 80,\S3Cfl3O = ut \t\ttY

ps,.rb€cld to uidqet (rsfo\0* (\nccwts t h\ces)+wc(Q \s prQfiz\ted tp ds,+ Hdd\t\0AcJ,.\ un\\s gt ioniro $0J\serv\c?- q[l\aJates

d\rNn\ )Y'\\q s0ftt$\q iOt

-tY\o rc$e oft ul\\CY\ uft\\\\[na{finva , {o $n\s s\gNtieD,{stt\L\cn

c\\ou'.0ps 0s ctns\.llhfQt\cf\ sas oft\nSnr\Q tet\rnsl

vt0 t

(s\N'

+ 9teRagnce S{rc\u{s'. tu\\\r\l ftivtttCn wl l$ots)0.^

1ufi\rvw U =fIQr,Qr)

= 0t'P. n Go'k

Qorrsr.Nuor's ob)Qmvq to fr{d tlgc0^Ab\\1(I\\Cn oP qttns (t alst"vuo)t0 wuu\NrQ tctit uti\$l ,bwto,iQS,Ib1a&td tr uu$\u cr s{u}r\t

Qreoeao

rX*ties

Page 8: Microeconomic Theory Lecture Notes

inclifuerreCruvQ

)o oqE

'DQACt^llq 0e ila c\3C\nO \0tncr\i\{lr. ut\\ \\, L,lpt\ o.t gK:sS vrtr\\\I(t to qrv Q_W cna.,wcj recdrsq lrgeM+il[$*ef tp tpu.

Page 9: Microeconomic Theory Lecture Notes

.Otil\ lYwq+ tndFrcf€nce c(^rve

()I

bNE\ER O(,I,\RS,

\>cy\Nnodet\s\\cs cG' \ndiffug^oe curve

lq.ol.Qolo

bposrttcn m tYB Aujyq rcpre^Sg)\' thz €ue\ oes\isre(cf\cn

'DtrB\qe{ence CWV€S tg$\fierqts un\ess q"\o persoruss0rno\nccrs\stenav

rqt Qtr , tre Orrg-rfh o€eo*\sffict\cn Sco 0-r\snghq lr^t a\- Qs3 , tY?qmoun\ o t eo$\seoct\cr)

. tOt \s \o$rQi* 9101

Gr

(lrtQrr

e)G

\fC r

-aG" (uu") --

F-\ter\ eofiS6tal

lc,eiSo/nteC(ecvw\

- Or (\tor)F-------------rEta\ scxrt$5cts\gcnn4d t{qtr\.fi6cF\ €r\es

I lBhar ?os\t\cr\ rghec sqt\sfiac$q\G ng\ef \n'\er€e\s '

CUrve \S COnyeX \n dur_ t) d\nirn\Srr\nq €Gltstuc+tcn

\Jqcrwie cvtqAtoF ncra^.se rn SBs

'ueesen\\orl\ e\)q\ pi\ff\ of\ kv\e gfioFh'$e\ds e\.'esoYne ontoun\ qFso$eRer\cn.

-'-

Page 10: Microeconomic Theory Lecture Notes

o AOc = -_Mu._lQ+ MOc

soPe = - H[1@ cuecsn$ )

'Bu&et (trfs\fotnts+tcns\rornts oA orrumt oe \ncdy,e

. ' F\Ces ore $vgr

S*

'+ J: \OPt $rP".$s

t\o {Pt'0e ) ' tP. +qg'1

tz) ts)'r€ 6q.5 | G* te'5

Qc-=tO [ 0c=5

I" Pc. 0c t Pe.Q1

Pc. 0c = I- P1'Qgt"* - k"*t

: \= bt ff\'X

6c

Oe= 6

Qc= B

R

b.^0cpt cms\fo\nt

G;-

AG" = --grAQr Pc

---- \)_.---' ,itfo"*,\ rwx( \o1f..c0\bo oeft\es t\CecfecdYl

'\- wlvw\\rr$ 'r?!\ 1vw-

-Yln, ' trt\ 1pr,,. seqqy\ {J\e e1'ttr,rUwr czvrUoDt"trn$fa\nt

oQh\tlur ccn^b\no\\O^

..,tmger\c\ ''w\Q\\es6aq s.?Q.0e g[Nfi C0\S\rOlu\+ = ffid*,.

Page 11: Microeconomic Theory Lecture Notes

Fc

t$ q= Wr only cccufs a+ Er (o$tr0Ulrn Polr*),flErq\nq\,^trlq F-doNof cF @c!^\\s uXasoW\Z. j

.arafyaes oe \rno"na r Pnce->\dtcme \flCr€dse:

Oz

Ur

--k -- - t,tutl{-oc

*no6s rne,some fim hovtevgr |t\on\ wQ{xH= =Hb te\ouote ot tYlts 0fRltaafi[-nt' M(]c > Mor\ I -F;- Pt

\ow\^)qad fe\rrn srne ft\es cn('use enoge do\\Nts tF- \v.r\ roof e \cc'cced$\.

= rB , q > SQ -6 te-@=t3ne\ gd\n ocs

t5--1 = +l'5nfiqo$ oe t s

\cec(eqn^...B-8=o

r\O+ Ocln oe O, YoL dcTt'+ €cf\+o 35 a*^cr- | VefY €qtNRec)o\redy1

-> ft\ce Dec{et^ses(!t

0f heress€s.$bq$r\tm{ 't\es rebNe\\ 0wQrQens, rs

e++€ct L $rrs\trted tcir ice cfeoM

yotl. lrsrgl'* rnote'€ec\@m . - .

!.ur> 9e.rqurbcr^gYrt fiE(e

5.t = \9=E

.6t

'rnccrn.r I -O\ifch(r\nq r^wa( McieCLS€"efte1{ L'treo\\ncopd baQeet)

Page 12: Microeconomic Theory Lecture Notes

;ff}w- lnc[na. osis\c{ cP

[Su[afi-]rrP\trr\-'|s tt.L tAtca vott^o tv\qt c0)s,tm.ef oets tt) \GeP asci,tre{nte betWeen \,{V\ctt- ttnqr.,l da r,..:\t\tnq + obriQandtr)^er6^oq e\w q$ucul,Y por{\ng.

uAIW@gJ,ryAItSF$Keq'-C;1}t"E?.'

Ghrptut) rll0 fcltnq

h( MBtrytr$Wslb€n6+) . Ug. Cung\na!.rosf")

-96iLgot9

FRvrKt+r.r

tonaffiR*"to.'*

tgntr'xqilcr fi\)

D

afe

7//>

At Gf ,r.tiilttt4l- qbsence oe u,lcllfet€ai\tfe, Si eotresgcn&,Pt sroo<rmi zes $rP\us, ctt^et qreas oF qucntfl dG, fp\-ho€_rh4,qrl\muvrrr \eu1t.

Page 13: Microeconomic Theory Lecture Notes

. E\o$:lilC\tq

- Et',price e'OS\C\\ of dc.rrsnd - rt'R $\,e- i€sFnq.e cS efre-q^gNh\ dert\cnde<\ \{J^c- og\ FNc(, ee.t^.a. concrme\s\.

ka' A''n &ro,r,ty &"ncr..O.f GNe-ygOe qflob\ern cFrnocs.p-A\o Fc\c-€ ment glrrits qrst€J\

6uOr,t ro so\€e- \t \s'r.oC.Aj\-cul.o]e 't\- 'lr\ 7'

%L@

--=-%AY

% Ain frice = APP

7. AinQ,ontitl - N9j€wrottct'to o.a

6'\B

l'+u

?A\5835cqSDt565

7.&-19 = ,*+o7s-t i

7, A9"uc.E'5

€-+ oo=4

#;-8=r 5iEp{

fl-€gtt.=ra

ll\lqh---x-tlz q

\n

-:-t - -0,St1

-t

Eod= -\'63

^,Nnot doe Sr\e anq?r+tno Sgn crue\s cto* Fice t q.cn\r\rl rvs.,e\n cpgoer\e.

drrQcnOnb l'/o Chcnclq'rn \dr\ce. f,ccd\^Ces -I.GSZ Ch€Nc\e \n quo.tiY'"iQ \Eg'\")l ='g\CS\\C rutiorw\aq6 quomltrl deufided s'reSqistv

10 CUA^+L\t\vrtce

Page 14: Microeconomic Theory Lecture Notes

'D '€ lEf\<l .\ne\Asr\c

u'rf \Efl = \ - wris/ erosH'qt,(rp(rcq.\ +eu !.ss\ cott 5p*q,s1 to btc\\Q\iqn\Ag-

qPtr eho(B€ trE- psice

-q\8

ooF

s2

-Lq\sB35cbD15e5

TgAP-l+- t/3-h-\

TrAO

736Ar

Vetol21

Ee'l'2.6't-t.63-0q

- 0,5\

TRl&oe8o

3r3roleo

rl6firrns cte raft kvenvc- rr,ox\m\Zefs, bruf V\rJ.-\ .,:r$ u:oct\qhrnuvn rc!€nu.Q*'\n d6 b €g\n'\^vestw\a \ \ocns.€lcrYat""rr.rtr T\&!t oe Wflf nncd\r(d.o.

tDNYen lQd\>\, 6 VP (A{),TRttP (GdU) ,TRt

ENNQN IPdI<\, A {,P (OdA) 1 TRVtP (0d {,) i Tp,l

^4 *- \Ef"l )t Gric\*

\,h.t .r un,\Fi\ flosttcrry

ahv'^r

Page 15: Microeconomic Theory Lecture Notes

->firtcrs \nquonc\nq kd" irrFcrtOnCe / vi\o\nqss

^,brn9_ qNenv suOsirtt rti Ocr

"&.tdpt shore of goduct

->S\r?e -e €po

qn= A%qa

A7" ?- o9g"

AP/ P

D\

=a6".mA

f '=

$booor'' $ 6ooo

.a_sr =-erP 6d

I

Iffi@"tge

P.-P.AP O"

rhl,sieg tl\!- der As ( CW\,e,N\Ar(CiAwUg4r

D:rtrl-ulqlior t1,r0 s00e\s \n crbs0\u$e{0\w,trrq, wdre lru\o$ic' ttro d€Mq,\d curve ts

beCq,USe .. r e€ts srol' ac.s.-r- = JGP $ge.

.lnccrno €tencrru

F. _ %ao*d'*% a in \ncqml_

ec = Foco&c = tA,too

E.=_15' = A=

7. al=.hager roco = g600

za6"- &_o =?r1\00 5r

_!I=#o.S3l

l\

t+Er >O .NOtl,na\ (s.^leru ) g.++0<6:(\ :\ecedfiyrr ta>\: ltrduq g3od+ Er (O : \r@(icc €c:d

Ae ntocna- \ncteoses, tne quo:itttnAocrsuma-d \S \ncs€os\fQt' 6 % ltwnSa \n'rnrurv\Q. qAId ede"

o,tb% fuiurf \n $rist'q cr\^B\rrrun

Page 16: Microeconomic Theory Lecture Notes

Rev\eut ff ri'v- r- r.;:.(-I\ t'c'.-T> -.L$ '?1. , i)ovf

.Cfflsur\/\Or thorrq (behind dew\o d Urve)->QQUierrl, vu{Mvurze Uili\, ltY\i\fted E qx\qpt coistmon*

LbfrUeft{q\Ce Curves -XCongrp11iq. ci= Cpoas q\vefi

"BudQPt arstnornt =\n6f fu/nc^icx\'G"= * .,[.rf 1"'"t*

Ye (P') ' a+

'find toc,qr* ->Wolctm\aed \nd\v\duA\ v€r\ceirg

$e€€rcnce-

R\ce ee frres IB.rdeF* cacls'rcair\+ 6i11 Pivo\

ostcg€ cYtOcAFrcr(6r.\ e€ee&..At€ Q"€

,to'f bctlp\\^rf

aGconsliica \n t.esg6Pss to ARicehc@use'

O fug,Linocry\0- d"6,.qp (GFto 6nt)z f$cfe grcrosng\eocef Eae$s€th€\ c$e. goqrng r..cs. €-tY\a-g!oA

Osrrstituttm to'e to eh)'sws\ttutQ- (^q- chQ0Qe{-gsod ftnt\a,v\^cfe e4elEJ\,€-g:od

6.

0nq$ufiic0llr-{ r0Ee a{,coq c€o.L\nccuvro gIn o8€ct wrafrice.{t\n4- S0 {ACtt ndtvidu-ol Coilld,1usf octo.rn th!- onC{rwet ''nO\Raery:(,urvc.(lolulj^. mOr-a, sqM[ \rdi@er\cc. Cufve]

,\nflt\s or tnte(\er Wod?sp,ndi^$se \e\s \ro\ilr\ \nco^4.Q-'t,'u.lc},!lo Sir{-\dt oF L=

Page 17: Microeconomic Theory Lecture Notes

$r (ilicc'L)

$r

(grlcet,Q,!)

(p\ce t,, 0t )

tftott{dEg^ig oN qour ts36olt! uebeirces - trlt.rc're g'tc-

ind\Rrgnce cufvA aceccr$qwrq! Ctkr\s is 8r ona-

eQ,fsoc\)r*" o*' Qg'

+r,l'rt* DervcnA Cr.,.rve- - Qr,rwr oP o.tt- th2- \ndiv iOucLlS &rrcrrdCl."l.c\Ps

,l\

I\-A-6

>'lofe q!\{ see ho^e w\onq u.ni}stl.ol.rt rocr* Gt@Lcbtr\ce

".'"trnpsuYn iSr -a{uo\ qw\amt to.x9erc\se tBx - Ffcef\ta$ ce tY\A" pfice qou ofe Fqi{tng->G,ut'Kr\ ano is b(l€r Fcf $tq ccnsr-\ynut?

-tl$yY\DSUm tcv = \at orYqurY\ oe tcrx

--t--

6z Ot Qs

Page 18: Microeconomic Theory Lecture Notes

Qc

Utv2

RiGr

exc\se toxR-- P t t'P

q + 0' 6e-Sx\ = .+,15?(treft €xcig tqx os o. F{-rce

irc(ese - Prvcrs qouc'buagzts)S*rcrnJ

+lumpsUyn {cu( NOfLs \\re qn rnccvne dRfGe:€L- L-T

= tls-3o=encl

+gcrollQ\ ocrmvUcd sni$tdLu-to cho ee in reu inome.(t€Cfec\qes tte ar:\\i\ k U.,u{tnq :lGrna dUar.,X1

'btuYnpsut'l\ trr{ q,ves ((nsuvnzJ-s hiqnJz{ cwt \€,1/€A bec@u\<rt is rrot di*aUng gites ;cof| buq lTtqhlZi qJo^tiv.totburef P{lCe a "

"u \cutrgc.,ch o \^iqhaf lndi@q^:e Qlrv€ Snce rpu q\ef'lClr drstcr{3nq :*ne flrceS gl/,\q \ndiv\ducl-.\ is cogcrbie-c€ gP++tr€{ rrcrC' l*tisQ€ti3.t -RceY^r o dife e( g\-t Cxr\bi ncc$.v'

*U rot.list tox Orc god O/eF oscflfAf -sofi\-q clr*ccyr\q.-rF qtir'. o8e roz\fO. a,[ epocS' 4i thq sOWq€Sne ncte.-tfute€c(ntdo ertri)

+Srouts lrstu'duots _$t aOSA 06 oss\Scr\ce cr {te€ g:c(s?

-> ttqoudrn't q\{a fl^orM [0sh,{i1is g.ul rmllt€o{nikide'bBit thQ Cfinur qooct is ncil cruitcrbtg

, " Do(rri+ i!^Ctt\ec -rF qcq qr\(, tYlcm m{f oc- 1\o/tOr-\,\US ptmcqUil crr-i(, te\\ob[q

f^ctlfo 0morn{ cf w\itL

Page 19: Microeconomic Theory Lecture Notes

l@sg. h\c€ Eost\otq of bsr^ccxl

.1q Or.b\O

cshcl+\f\e g'v€n

,n D1 !\CtS cl- \cr 3Q{- s\sf'Q- \nG\\!s e Vq\J-e--

v {fw_ Slrec=Ret t3fe =\<jrNo\d Crdla-alcqet q.Q< \o a$c\\ls< rJot$e )hne-'tas qc^sr\c- (he Ff,\c€e\os\\c\\ o€ dewtcnA

EP"o6 aQ'

=- %AP

I,\- tPo"b': -\.\ . ..\.\+... €cr evetl \7. cho^CK_\n Rice, tYure \s c^*\.\'aq.Ocqe in qu.or*ity in +ie oppcsrt-< q\n=c$cn

\Ee'\ t\ +FodrrzlE+'\<\ +\ne.\OglcI €4f \= I .* On6ee.c\\c

-> fcr totcL\ Qeuenw_ - Epa

't lEp"\ >\ .. Pf [G".t); TQ ']tEP\<\ ... Pt (.d".\,) j re,l

-'fcrcicJa oktrnq qa'virrn&tcv\c€ /vitdrrty /utgency oe ,qod"t\ffrQ.-\n \Nh\O.\ deOs\d t= .tnt=fiqrec\

=.INQ\CSflC)n, Srtstitrltob\\t\"B$qzf $are

-> Efr t sbpe.?o=_&, \1ffiLel --+e,ape

F\vZbrG/trn^c-

Page 20: Microeconomic Theory Lecture Notes

Er tirrqne'lE > O_'9,^Periq-/ rc)tw\o\ qu".l

+ Fr >!t:\\^xqryO(Er<\=nec€csi\

b <O '\neeJ\q- opo<\\J

-, S\cp. "+ E.

Cso-, R\-,o Ees6.ry% AQx

E,.1= [$

?=

P

Dr -- €rrQ Crronqe fforr Qr -to Q.Dz= etr-q "h-r.i- +rqlr., Gr toa3

D,zs dac'qNd crsr.?a-\s \(OQ€resPO^q\V€- Qq c- cnoncXa \ntf\ c-e

^€

= 440.63

F Pd= <EP*'= t+t

Qx'=SBooQxL: \196

g"-a= La'/G. = b1q9o.g6€ropaez)' oe'i/D) zEaCd* "l

'o {}€- s\qn C-/+) oP trra- r.rcttr.;.a-\JExqSg = s**r\t\r&< &ve)

E*i < O = cocctFremeas\ (-VZ)\

E><..\ =O =. Unfe\q\ed

\\o

t-1..

Qs Ql. Q'

o<lEq\<\ =no+€c2 qq\ttl sero$<.1tFrl\ >r = verry cesisns*(

Page 21: Microeconomic Theory Lecture Notes

. Uncerlqr\tlE{g*s +outcccf\esUrcertct\n\ oe c,ukcvne -OtrtccffrA o€ eVq* edY\yEt-b.e.

{.r g€en \,qi*\ \oo /- oSS(rCq\c€Rgc= 6reaoi\sq '1n e\rec* /ao-1iy i1t €i\h\ urr.eclG\N\elscolortii.l -- tde- We\rnooa a€ q;ertt ocus\n3

Rfg tuscesto..r\ tgauqvo\\\\ -inPo b assess r\ve\rhooJsF Outcorn eS.

->Gc?te rc€ly Y5e:O Rrst Fvcrse-

+ E(R) <R.-w\\\ rs\- ec\F..qe'b \n \n\ie\ryr<\t, qecpfe--frvsery to osord 9<tto-- tr.s+ Q.1-

e,<t$3. te fe\xn \.rctess lnq €be\ -r{set e4p<\e3rettltf\ e qSectter tfrc) oSg.{e d \etu( n

@Ri=r Neutfq\rs €lR) - Q cocr'\-ceirde

@ Riv- \svef'- ELR) > R. -ryE\ *lf€P I tB{ !q\\ra- Srrv\s {v\ore-

yecrtrt

+\ ode\ - R'.3V-!o\r\rc{<{se<\ retu(f\ of cr q.?s1eFY€nt \r.r\\\ lnCC€aSe

uF!.\ -\ce\ftS q'e c\'\ft<\vi<\j<9.-\+Yo+, q€d'r.n qrq\ cq\rcd \nc(evY\c$\*\ oe rg\L\f^ o. dCs; slfaUo-t

\r'ic,{en etts to -r r.cJr v\<lurous $]e.J bA$g CJCil\\l-au- \;l o'rtY

I-^e--l L/-*;G L*t*nt.>Ft \cr.g \q:Og cP'rc<sn<_ (Rr^ds), qcld !t\ q/\q\ sedrFed*o

\ n C(erf€n+ in {tndS 1\e-\d wrot e e(trsR3ct\q\ tce of,\ A\ro.\\nCreno.frt CJr Y\\ thc,{- \e\re\S o.e '*rca,v\c-

Page 22: Microeconomic Theory Lecture Notes

Lr€<gectedk\txn ,.

{noncqJ\ \N"str$.zrrt r t{6'/. : t6Oa5/. '+2oo8sl. - - €oe

Ldr\erh €xgecteJ

E5t1=R. R,.. P.rR= .t Ps. Qs= I PiQ.

L. \ n=3

E(R) = Co.uor1qa,l ,r (o.28)G6o) t Co.Bb)C2@l=160 - \xlt-lo

BF) = &$fts qvgse'. ur\t\ rrrr efqrq? \n €\J?Jr\

R€\trrn L€G)) ( Rdqr" Re\^CnQspw,ves, n\oq en€gqF \n e\,€nt u:t'€(€ E{F)>RR\sEN€ldfd\. R.€le) tdl+ decree)

LoEr<orno\e:

Rf\dB= $fO,cOo - 5O'/. C^c)ocs t \Cl/coc)E67. cno^ce -\o,ooo

\) Lreq\ teiwn

u(W€(Hrc\tn)

R\srQrvertekrqn 10( T5 soK

(osur€d)

.UoQ E(F] \s rnter\cf 16 $o€ R

kturn

EtR) =eeooo'o E'+Eoooo-o"5

:\beOOt eEeO:uOOOo

E(,R)= R

.,ccn c,\Es exp\cr\n \ffi $^a- ogscn \OUll\ i!\[ lnCtQNe ln$r\S \63

Page 23: Microeconomic Theory Lecture Notes

R\sk \ove() R\:\< Ner^\fo.\

'+Fcce fnus*en4\fle \n th\S At\vi\ (Assqrf.\r\3 r\sto.\Qice)trn- ao\uiquq\ -E usirirntr to grve ..p' =o.t- -e tr.e asss\+totc.\

SK

?AYY\ou,f$ Z rs nd\vid\ qr \S \N\\\\ntto (jrve c^p to fe<qvet1€ OSSu(ec! lOx tbis \s kc\orao -as tna- 'f)s(rtqr\cQ'

S€ro\ur.m.ruUt\r\ oQ exgeqteq\ uci<- \s cne sofne o'a t\\e CssuteS

tt<\\tt+g Ge Uo\<- z

ro0r gu- \nr+\viduc"-\, \cls,\\foc\ce ge\\c\ Cy\ q(\\v\c{ o.rrrod\Z 's o- Fq\\rsufac. tok\.8\t €x trre drnpooq,'*vp,yQot- be bgcoj}E< \\ \e Eqsed co tn€ lrnirv ictucr.l\ preeeteffe-q-d oJso U1a Feffiurv\ tever\qQ.s fr tftsLuonce crncgot\6\s €q\rcr^ c) OOifv"' Po{mefi\s, q\ ef\A eCfv\Fs\Y (D-\\\ (\e{

R

tuqr\ gncfi\s.^r\nsurofG r=iA\ ccrnpc^q os\$ Qo.q'.

-cto0cns- 4drn\il er(Q'e$g"S

.u gK0.t-\ o.\Sc Aee(\ p["oRtist. (eOcrrorv^.\c- c T]cfmd.I,rO"-*/ \lJrqt \or (eR$^ sr\ vhct+efqc?u\q '\e.{ e^go.?<

Page 24: Microeconomic Theory Lecture Notes

>Dsosrlg \dr$.\ Rg<'D Sve(siqcoar\q1- sPtc€|Ci\v\q S\S\cs ov€f c\ Vc{\eq of prccr.cSs 6Fncns - "1c"o b'.r.| iNq d cicS* <c, exec$j e -en;- co"ttac+

(r.r'! ceC\'o\X qoo.E qQrn rr\oSS)

-O.C\q* to b^^WseXl, &c Soc. tt^ciltrtato .trrt,e

riSJ €q o' €ee

Page 25: Microeconomic Theory Lecture Notes

t4tr€H#\ @tq$ure *6.uncerbifitv ' RisK

t{0 50 nvlun

?runu^ount rvrot inCr\vidu0,t is vrr.itilvrol n S\ M tru o\$ffWPoP tt0,otsn mollv\ N '0rQtM\urm' J

11oegs)

oe.0t.20\0

->sutilec\ed to ormrn\snw utt\\ oF inou

EtR)= (50. o.b) r (3rr.o s)=tlo

-r*r i1g1ru[0 . TOtrN crrv\Fffio\tcn =toto\ fieff\\ttl/lA

"bv\\ im$itO{re CCvrD0/lig vrritt nCVet Q0 tr thtg P\\c\.b(turtp tA(^{\l-Qd tD cover ldp,iyr1s$&flve 631 + pd$itsl

\]kpJl = U(R-lrs,^rr vr\')

.DQ0\\rq N\\\ R\SK+ D\\ets\t]ce1\co

'D Stoc< r (qo.u-iFtnsProms\r'*,

s0.,oA,u\)<; Ti\t*rq,o y,irlh,-R u,!,totc \, totth S e$tiog

u Sss\b\e oL[tCC{Ws r

- s\coc A FcrNs r shoo< B fui(s-8r00(n M\s t Stogcg Q{rr$s'HOcll{\s t B Qrrts-AgUtn * B g:^,n

E[R)= 0,e5(-r0) r 0,s(o) + 6,oua'o't..-.......\---.-1-tDMSICCKS oroslod. E@1S:rCC\s

RJ' t tr^\\ @iN(in i€rtr\ oQ Qpining-. - ec)

Profobr\i*y

0€0'Q5/\.a(

ie qo,r qirn irr Sotlc A, tlo.^

Page 26: Microeconomic Theory Lecture Notes

S\o(va $ro

aouqbit'fy

@'/.

------+R{$:ot-\>st$

ro)

L.[R) = 0,s (-tO)+ O o0( tro) = O

lbos a nS( Ouefe es$), c6lt.r. r,cuti p\q!: stcL \,pecaur<.ilo Clctuees oF qgriting cn e*1rs^ qcL$-.crv\'-- \\ \cr.raftf{Sn aPilcr' 2

,9' Enle\sisceflq)- outcorv\os se oif€tgn* {tnstcictlc-rs (

e\tnQf t^nte\3\Q\ cr\n€xsA! retoted), * rncrctses Neli\:€ingoF Ofi \ndrVidua\ € b\ dNFesen+ osse\s -\n srnol!.e{qrrg.,|l^r\s

>OPtloc)u'$rfchoses 0F iight io t\oCe o. qf'u\3d\ osse) a\ o. ?rcset

fr\ce's &rttt0$ \n\\\ tolce p\oce ie pOrS,€S h0xe d\e83ex+ perceFp^s oe

f\scs

->tqe\nRlYrst-\cn.rw\\\ yBQ Yd\{idLtd\ rcdure urpenOtrtY.b tnorviduc}t rrc\\\ Seqrcw ftf \/\ 0/e\{\Qo \t ape$ed benQh\.s\dF

ilft ooect€{ ces\ \,

E [odd, Y&@tit) ] Ekrdtr\crrrcrl cos\). EC[\B) a > eo{c) |{t0 s0uqv* t

E$ts) = E Cr c) 0ff1tnu\ N Ctu^0ur^t o$ inFo

- trrds u0\l\ c$avftose tovu-wp<vet'1Me

Ett\$ < eL\^C) rS i$to sOuqh'\

Hur^ i{$NP.6g4q9 gwve

il\mueHi|l(L

*hru\lvt$Yt{-Jet,el w'otfg$gap\k ES*f gSf lpgg;rt ve soagh\, $e rr qhar nsc br1 .o\rr

Page 27: Microeconomic Theory Lecture Notes

indisftf€)^Ce curyq

'&*q fis\<

ri\qrpr leru(A =hQh4r c'rSc.

='t20€Ctxo

3-{5 -)

* tttltCf nLimk€rso(€ qclhrcl

-50 | \orqef, uouic\r,\le \,CI.\uo

4 - d$!, tc't tfffr\uniK.t

I oor. ttofl sPoo,trth\rt

Nl.[ t{uni \t1( Yev\AOtAts!

&P,,

r5.

tt. Prite acrsttcrttl

"tqiq it tc -IQ" Fodut+

. M0v -MC'rP,i E-!ltb > MUrfr@

tbH.sktrr eqUCU.

nft ct qfi imurv\, v\l.4cl\ofr g6ccfr qoL\ \^aue

to cwnctre t\(Q CLl ornf

Ch$c+ t-v+

-tI

-!

{

-(-{

Page 28: Microeconomic Theory Lecture Notes

e,-c8-fop

.ftrs.nof's U\exwro-,4 p0,qetJ

o*tccings- a f(J Qq(h pt&rqet l p040ff rrqrksrcqtQ\- duc_ to rgcerb\r\t\.1 0F gth,a.r p€cft€'s berrdrc{

DQb C

S

{t6n c.oc't'Qe

.]o\rr- rt CCfrttS€S,

EtR)".b(-\) t"5C-3) =-2-\s -?-3s

iQ spn\619\= 9.5 110) + 0-S [- 2) -- -5- I - -6

beb.'it Cg{fes,E{R)- 0.s r-5) t O,s(-3) = -2.5 - r. s-- -\

\[ S\\sA\,E{R)-0,r(-\\)+o.sGz;= -ES-\ =-6 5

tD1ila Stofrq\cr\q cleriried c|.r\cd119 m3q qgF becfiv^nwmdurrc irorbbrtrl..r'utt\ cri\^sepli er' uq c$spd\€S

-.lonn

\-+-r5\

-10-sxt

\Gt

-3- ll

Page 29: Microeconomic Theory Lecture Notes

T-rfr\

tr(m L

+Exornp€ 3flrr.r k

frtrn \ A

N

" hodirc\i cns - fi{ nr{ s tsernvia

eRnQd qfYn w\\\ ortgrd r$uq uor\lr\O.S, (Qqqd€sJ o€ u:^or tl1\2,

€!"\0,f S etiror .rS.

I ornlm)fi\ s\rrs(<lv -(ec.cnsres oPNY& WA o\j\Lf O U'doc5 J

frccr.rc\\m _+utGb\e grd

--'BeS\" o{if(o/l/l!-'S firrn L 0J*€nNVqt 6ftl fi{rn K |^qt ogk[end'a1

tritol fi0t\T - \5 ; {€ostrr tt c0\\Ltl1d /coopefclre, so Ti r rn x- urri

00 0no ilzr\ sp\fr tYu flcR\..€bCTrflr'n {Ctfudrq ils ef},r\inc{f* S\rcLler.iq rr.)r\\ U\e\d \ess

tlton qrwui ot\\Qinp un\es\ tt\a-'{ eo\Wrde.

FoCtCs qrr\:-t\\ tyl.a SIQp\r.\ Cr(fVQ)-> Rca\lat\cn- tL(ns-fcsot\t(os f\\o u\ecb\rr cpac\

ffisF-*-vaEcf-enlN\ccrf CCD(O\

-rn\ufclJ.(c{}Nces- Y)fd

\

t$N*R"U'n e\\v\er tclocs icq? rto{ l'irflfrffi''r0Pejnt is G) tQe\rcQ fescusce tqu\e$an\

)Product\d\ \'rf'ci\q\

O= t ( L, K,-r\ \n tYlZ \,etq \cnq \\An,#d,#tnnrnkg\l 'l

Page 30: Microeconomic Theory Lecture Notes

Q= t (L, r) rccnrrroeV nch'\ne\uded. -- Lotle RU$J(KPt cdser\+)

A=S( L) tecnroregil.. coer\rt Cfe = SCIR\ RUI]cfBton\

r-D Rcfft = TR - .TC.

P.h - nrc.ie'-

ft cfi't vrniximrzOr\ \eqOs tc. cr:c\drn$ trrq cigh\ q\.'cril\ tstfcduce.

->F\$q Jc0{\til

K,

# = S=nsg,i$ru* d

-AK(FP\.) = tL(MPr-)!g = -I0'Ar- , MP,

\e o€ tscqrrcnt= trctqir€r-tRr$e f t(d1nlcd{

qifSrrutrcn*Wtl c,rbit,ttl tc.trr€ t+\ac e -I resu.f crt &r-o-r:tV\ql (r/-)

.E{q\rmtG. ,sru.lr*

)$mrwiw$q Ubcr

l\

Page 31: Microeconomic Theory Lecture Notes

LDSkfe cQ rscqwart \s f\otams\o^}\-v

\,\G:

QE

GlGz)Q:)Qq

- cn eocn rscqudr'|r wJQ ts adrve'r oYrf,urrt oe q't\{J\.\t

-iucq plrq' q\\Ssc.Ct-h\uJAqS cfnvex ciuato dirntnivrmg

ff\of $nCI\ t€Ws P\radLKtl vi.\q cF'cca tClSOtrCCe.

Page 32: Microeconomic Theory Lecture Notes

or.!-o&lQ

+iF l.epr c\^tprJ*- e\€\ {he Snvre.+AE:MF.

AL Mq<

-> qs trre qutr*\tq oe \3bc{ irf,trras?\tYle ryrd\i\nc'l p'cc\tc$v\'o.1 dF lc^bccdec\in€s, L+ t\p-1

-> os \<'f |AP={, i \< V \^PKt

AE. r.,tcAA

ATC

TC {C - rrCa= G-'?{MC, lernt &Pe.Nrc: c /e{-€\\ etFb

!4c

Ar[C= *fC+ AVCA+c V qS a'l

Lo avc+ ATC

Page 33: Microeconomic Theory Lecture Notes

'CcR+(Ccrstor^t\dq)fqnd ovc,.\lq!D\€ to c'flrrn \n q. gv.' ferisd€timc

-> L t \< oce rcr\es\I

c= $so\ \-L

Pr-. $3P" -$,2

3C:- Q-r r P'-L- 3.L+l-K

L\= fnx t k3

fracL \

rnls \s ttnLof'lobCf- +

niqK0sr 0u

>FfrYls F.r6\ i^ this ig to mc.urmr<e

ou+Put-veve\ / g\vff\ ccBt o1,r..+lqYs

efu' or"o to mf n\nirae=ry.<=+

K

Ytar<B

fus\lt'le €ombos': L.SK-7-5

L

. r-= \ r-6' K=q / l<.6

t<

k,

AK-PC RT

E-m

->\€-rn\ E * Tecrg=rn1Shpeee c>ut\qt.\ -- A\:e eP \sst.^cc.+-

- MP-_8.tu

<:r..r+by 'bcagrveO e\,\tF,rt (et.ef

nl OvlasJ- 0cytltev4bl p

cQvltat t\^at- nr{ tt \[l

Tr.^t \€ve\

CIrnDCeK q,({-

MP, t.,TP*.' pf =plJ}lpr

Page 34: Microeconomic Theory Lecture Notes

?frrrs uc\\ fcdlrae t\4ogiven pf,et ce*^tFrt Cuc'r}l1 qr,rt,cdsegent) r,:ir+yr x +uomic,tsts, d)nsebY Vcq\no,t q'eJucfper dcet\6 oF qcrr €scucaes is {f,rQ

,-tF }g equo\, odjustTFeryt (n\\\€feFo\ce to \o\\€-fna. clr*gJ&- \e{q\

r.+ iQ UP* \ MPr- kt

-,'.-)Px F- L{

L3t6 =*+r+ naigS\n

Mtr6V + MF,.,l

ts1is \O€q\l€li1Ll co\t t Cncc'q-e.;os tYre -*\qu€r$it\l 4 AQ-ta\irrseascs CrD'fiv\ q^cFiil\ o€toboc Aw bac\€) tfere r,.s c.nel egrn in l\P.K

+)

10 =54to

>\^tith g\Vefi Gi-o.^tbq ,Srt '..}"r'o+Seocn dts lj\q c(^n teve\, ihUS fwn\hgc* 're(ffc\en)Ltq,ra.

.Ofr Porrh R

-. IAP-z-€Utrs'P\.

& F," ) f;'u.r = 6-4.i. rsr nd-7ailt

MPr0 r MPu t

.5> _- s- s=Z

.lntvlzSttrt nrn...

Page 35: Microeconomic Theory Lecture Notes

0q_=03":ola

-Pemec\ Ccr"f}et\t\an-> sf€ecttq cornp€*$ive rYwcvet Rtructtr,rrc':

Lb (ndnL\ flf frB, - no s\fo\egr e\ngt> ldsrtrcoj. ptod.rCtbodeq\rcr\€ ond fd'$'\nitfrre\\cn flcrlrr.b'qfaq erfiq tenl- ftdn m5f6qt -l

pmF,nt stotses witto0pimclt0

+ Prcti* firno

lR>lK'ecnun\c f$Cost

\o*, b€ccrn( rfl\(e -J to\€fs,ddecrr\f@bq Stb

A.[R =m+Ci\9.?Y1+

t/\,\ (-

ftrc

MR

rrJ\\l.,\/\ S\oFsoU{L aSpoti|.

6qq9Ur,rt\(c\ cos\. rs 'rrnP\\c\ r,enwrqts (esoL|t(T, dcQs |tot r€c{(a€0(t\l$t tr1t'1il,{,U/1er fl,Laq de fcx,Pu e0{il{\t{\,otw{tuittq cos{.

ItR, = P

behAeen tcncpvrt oP TC\s VqTR, O\QJA gt41s" \s 'ti^ll- Lt^Cl^tfv{rrl

P> nrc

Page 36: Microeconomic Theory Lecture Notes

+bf€f,tF€tl00 Rtt4TR=TCP= k\C

"' 00gf0hnq osith b5r5'NM/>14R Yc < TR-< Tc

@z$tutduun

TR-< vc.P < pMe

AVC<p < pVC

c0^ cNq ctg( op€Jo{ng cos+

o=\str &--ltOP= \0$ ft\C = to R.c€r+s = - \,8oo$q.1e0$ rc=$c1000 [\ossl:J

CI--\tc)N/Q= ab fi)ed = rc- VC = h-5OO$

Yg:$l+5CO C()SI

o9eroflr\3 Sinc€ c\cs\nq t^olld cos\ v\^6e.

Page 37: Microeconomic Theory Lecture Notes

.srnct-Run \^pp\\.t Curve

l4c+-sho*-r\.n E\rpP\r.l. e\JcU e.

i. -*crririrmurn p(icet'^R

Qr ott$,\rn- quC\^tirq t0 {)f0duce

>ttlz sechs\ 6na-faN{c'\s qbovQ AVC is t\rq sncrt-fLnsu{fl^t cr fve

Totcrt coS\ = Vcr\c,,b\e + fixedaoS* Qosr

^,ssqld\nq erl( ovecntcd- (^)v\aJA qou \rc{Qcts? q\xvt\tqtno flxedccst ?er quor\\\q decfeales.

.tcng- aqn ftOti{s+cru. CoQtS OfQ- mnob\r?S

\

P2

RP

-?cs\tlvQ qroft\ wr\ o*hacl rnc{ Q

BQ).tOts \n\C U,1q $dJJs\K4-sutDk-{ f o^d frite .1,

- rn l,tvur,tPfofiils u\\\ V.0rd to 0

-rnrith tos€S, ng oPQrrns V-siryg\q V, pice t-TRf o^d F \Csses$\\\q:) to c)

Page 38: Microeconomic Theory Lecture Notes

" tonq- run Supprvl CurveS,, S=

r9'( bg-* *ppt..t ctrf€.

tD.D\y

-\n vnoc'k<.-\P\c\cQ, bctn D r3r^ov€s ooo tYtU <:C1t,..rfiOt'rtxvtrs Vr\ttec{tm\q1ht exQg\tr\c() dec\rn\ng p{\c es

-t[.!-Uo"tu0 ti\0t q6tg\ t1apl( g,etro [eq) i.ui\lt$,if 'v\0rJ\{tq +o-

Uq fu r+,becqr.rrs€ t\9, fr\cethottYlL rr$r\ret s€ts -rsrosd

8nn ul!)34- SA0 dG^^$d cqf\Rirt\ccrtes.

. Ccnsrlwttf Surp\us

8oclot\t surg\us = ccnsuw\Q,( $\f?trls ts0duc€f srf\u5

ue=f{t

Page 39: Microeconomic Theory Lecture Notes

.\6. 03.20to

.comDetiiloA enob\es €s\rtces t0 q0 to tha hightst biddec trnost setsfaclr,rcfeoied)

.GsMto\ equ\\ibnurYl

->QXOfiQ\e: \^qt\ce+ ecr CCNS

$0

a|{Y

Qt on

Fotbet ft.r t'\n\\e

derrr:nd fuc cocs

VL

D.

aHiwre

\/\OrEet gcf A$to urcX.\C€CSq-

+ rQ dgrsnd \nef€\ses ...tif r,,su\d c\J\so r\^ocn tnzfe- is oo

\rclecrre \n derY\s^d €or au\otlOt\gS

r,tf!2fe \s on lrcceose tr\ ty\gdQrnond Q:r at.r-roLa6\c6\ ;

burts tlnCfe l.roct\d be o- decce6(s€'n suP?\q oe- \cbcr ftr r,sotlqqpods (\cundfq moc\^\^2s - .. )

>'

(rl tt

t^r4,

) $\nqs tn6't \,JO(X\d oS tneffE*e\s cr\p[ne eeAec+)

4., E\O.stiC\t\ e s

r, Dota co\tec\\cn{, ly1p,.,t/ot-r.\g.t\ O.\O\qs\S

->S\fenqt\ cF rmpoct oeq\e \YLnNP\

to Cfl1-ecs Oepect\S cc\ thc_ryvc/tirt^.4

e@ds

Page 40: Microeconomic Theory Lecture Notes

. Ng\Qdre hftsrrr.sis+ fttOucSi:n hssrb\ri'\ies fur€ir{on

6o

c0nn0tfroduit

S!A0e

(flo rrtqrptknoltts\e)

Qe

4r€don\cqt e€Sirencq-qoccf,e o* tnc. P?Tcucve^,Yr5u,r do de KJ\O\A rcrnOc) A u:irrl 6\lve niqYAS\ sAt\SQccttoO:

trnaar\ c ustcm-or's \n"hteerqrce :ww \

r m4se\fd\ffieme cffvas tese6dDr.3 Wa si\refis\io^

-0t \, qotr.^cte c* o{fo6o*i0e eFftc\errrc'{. F,{.xt hog:c{otle fnove frcw\ ft to B?

!|'* \s tr\ Srricrnc'.tfc fespdsetD0.l B, rccI\n\oaL to.!.occtflvq emciencql} cr^\cfvlof\

"brylsrKl tpfe B cnxJ dewrnd lC\ oe R.$ rcenu$aCk{ets (A\ilr\c}.rSee B be'r^g rvrcre vcU.6RhoncQ fl/\a{orci{\ Foduce rcre ts4\d ev\a goints|r',ov< ftO A to B.

o-b = fe\cct\ve pcices

Pn

= -fB = -l19.repn Mur s

\3

(

Page 41: Microeconomic Theory Lecture Notes

--?CPen Ec4ncrrq (qlmo \ntemcttrcnor Uode)

oOt Fint C, one tti$e foC Qgm'erHtroae cr.rt Gf,*'to reoci^ h\gnur\rd\reie^ce corve\

uhtefno\lcrts\ tfode rrn$o/es oerL.Ee\nq, becorj.-se o]rcccd\\€ eqftOgrrlochire-'r,ie d os {hlqvlct'rndrsgqrceC.r YVe-

qllftodudor

l---------+PnPc<-ts

.Soc\e\'s Su(PtuS -- Ccraum2r r Pcooucecsurp\us sufp\us

->Scc\etq\s \rP\LrS \S u.sesr os, q pcoxrl €cr (ceflesatcmvecF)u:eiQore (ure[-belno)

c(,nsumlr\ufsus

al€rrne 6/trrrrq

[trn\+ cn qr.1o\tl\

rtl.. -P9

Pq

,rh

ilr)rodrsurn

no \rrnit

bss oe (@solfc5 (deoc{ uetqhit)

ccnsum(r s\rrQ\uJ

091oftirrna

t\(\$,rr-o[R?JK€ oQ nsrVd ftrr,rlarrsrYd outcc$4-a- orY[eu 8-\crr.lOcaJle ftdericq.

&,m\tq otoCfteo.wrC t\onqd\.

Page 42: Microeconomic Theory Lecture Notes

(.cf\sri.ffifrr

+ct.r \3L{f)sr-l11

.lc,.usidg

1Jsubs\d\es Seq\Va\ ta e{!|c\^aesto Picdtrce o+L sqzr qrcn'ii\

deqauPrgnt tors

acnsL{mQ_{5qr p\rs

q

D

oqr

^, ra-r\hOrlt laSJr \ Ct\cn,

ccr}Suma/ N\Pu\=drEPpgdrraef Sr.ip\uS - P< rrE

/! {r)$Y\ qrcntt\ I irnftnec{:

cCnSWEf Sucp\u\= dP.rcaPcodqcecsucp\us = fl*d <tbsu\rsic\ = tetoa gcorsa\ o616odurc\Qn\ \osS = Ecb

frod @cfla'!r/r!€tr

o(G$rhrJ I

o\hgfnA\dn\ trodc rncreotse o\8r€\ u:gQcce ce socie\/acfs^Y\a-rs €se c€ndRc\o[y (lrr ObSeKCe cF{r$U3\ qS\\tJ"Ce\]

l! lnbrF\\crts\ qlde Aod u€\Glre (t-le-u,-oernpD

cctaury\4r s c{e{fis a>)€(o

9dln\r\eruibsere-

gt Qaornsg. QFa"".sli<

D

&/ttma$rnur t})l lnYl$nillit

cqsuilvtorswplu)

Page 43: Microeconomic Theory Lecture Notes

'ereSt\cted Trodes.tOriff\- tc^xes m imgtst,QuotoS - l\rnl\s cn numrec

lux fevQ/|ur-

Ogod 'trsri€fs

P1. Rtce c'elni I + tcu*

P1

?tn'

Po

Yt

-au(utsuYlttQorr

deadureiSpt torr

Page 44: Microeconomic Theory Lecture Notes

ttrilreslt

Or

lr-

.lnt3ftr$io/tojttlode

**f a",

\Oi

lmportedtoto crt lQlolte \s s-r.cvrthcrt i+l€adt

*.r P<

Yt

' fluto,^kq [no tfode)

T-Jl\1, a

.Tecnnrcql- eQfrcle cq . h\\oQot\ye eeRcronu{

Page 45: Microeconomic Theory Lecture Notes

.'Toxgs cnirnpcrts

4;sqt1geqclloc\ tzuel dec(eCtrzl

Nqr$\ grice sqrro -ff

. DStr r burfrr e Effioe.rul>0erntce < John

oerectJ. t Mirk

to'Nnontcui\ 0u.t 0.imp0ts t

lz.L!Pl

T

Qvr

(w)-*(-(H).*^0k rni t\o{ crJ"\oc6d10.).,...tonn prcSes rn\\E \n fe\Oi\OnS tt ceteof wwe Ui6n {le0lrrt<does . ft\s \mp\ieS fi,re+ t€qlrye q'eftrS Cersl i^ {etrrttal1 -$rttc v!^ff a- thcn John dces . Thus Bcq+f i ce u ll.qlt/e w mltr ftr,Jdn\cP(pn\.

Page 46: Microeconomic Theory Lecture Notes

>Drshibufrve eeRderuq, urrtofi thcJ€r rs O.lloC0.t\cr)tcYtOf€ bq Cno omQI aUOcor.o',, ccn fn&te cn-o taQt*€CoQCu:i$nri r'onttg ttro othor ono tocrrooe.

u{rdnSdC\a-t CCFt \onded,u in\t\oL o.lj.sc$id ccn be €b*e cnqvcnofQ qert tcnLLE:

dr Str r brl{\v€ 1us\\Ce Fs\ros

.iACnO[)Cl\es+&0 Frcm-"v10 c\[6e $rbshtufes)Bqfiers to efitrq

P

\I

f TrNJt(e{ pcu:6 -ob\\\\ ts chang€J trrce wrc \cs\nq cu.sf,orn"J I

(

er

->Earriets:-pQcrr bcmiq.S

.uIiC€J\S\nQ

"tCttemtNCi"'t\$e l6w\df\b\p

-\\otWQ oe ru{Yc\ tPrcc\rcf- Oovernrncnt oss\qr\pi-EnCrrmiq rcoscni -htgh S\oct uF cos+-ECOnCrn\QS oF SCG-\L

Page 47: Microeconomic Theory Lecture Notes

€.gs:sD

. MonqItis\r ( ^aornpeHt\cn->monL[ tlffns

-+ $oif \n6O flca.)> eos-tg\\rut 1r€xtt+ ptcduc* dr€Fersn\rar\ c^

Q/e'.<-

rrrncdefOetq dorru.nCdsEf\rrq dcf'$|, b€asft.lrw

nrr^it\ price c* er'n, ftofitS Nu\ (rp to O'tn tK9

PC\q {L\O '^., ur\N pt6yv\O\< flOd\,\Cf

d\8Qge$\d\co\ trrrolcl^)Pulc\ic t€ksrtrrrs + ody

" 0\i2

)

\esfiRe{e\$G\ec\ Q{oduct

"oru,tggf ryy{:\^yFltet pelutuccr reod\v\S Co so4tcKrnd ci irrlerteparttEncP -\ecd\\q to prrce sodrrtq.

", rUNWQ.r ti^\\ief\CAffiq ACCUTS b(CuIqL t\{v\S'Gcet^0t SLUe Uo!\0tt cttl.0f \ \J\\\.ch

ru!$er+arnu tecds tc cOurrsrcn - cocrdwute octr\InQs6es\e to)'t.) tnz rY\5r\ct

" c-0ft€\s (ex\eh^a cc\tus\cns)-o\rQ6p611ps ucn\c\ crs \AA(MqDo\e\ Nlc \eqcult{

cucr,tcjtng $u\r dv\cnqs ote4crq (rut cng'€rrin)f r M^

'[i_**.."r> -O\CS\C\1B con ads\qhe cltfq8A ur\^-Q.,\A

nol tn 65r\13\ \Qco.ret- Qr* Qa1\

NYblI R{m | - 't^l,rot

Sf rn t^j\l\ 9f(]3rx? \J.\\ Y{cilx(cqfrc

Page 48: Microeconomic Theory Lecture Notes

-\o\r€rlef o$- tyNt aIlOcOd q\k$t\\^ , MR >\^( oq^\doCCr^C,cr12 rort\ vlc{'\+ to rCf$eqse 'PCcdv.Ct\on ,vCo\cVr ecotead to \cflrrs ro tYra- w€(tet" leodrnx {o (^q-quo0htq belnq Ur'ob\e tt c\€3c.

- vef\t ectsY ftf,-(ist{e\s to .o \kaPs€.

>Costtt/€rtup hi.nqdtbdFtlols" +O qr;-dlJ OC*uOttq vpAfl^g qe 6)c{ clqfeei4gcfl 96 ice C\\\{?qOr)

! cost t Tnd)c qP' = rnsJ ketoftnAkfn€nts Agreerrert

cfl 96 ice C\\?qor)costt Tnd)c,{E=r,t CO

ofrice \eodeJsh\P

?

Rite(o-.

gtre

,, S (! mci

7 fe<(i'.6t"\ derftsrN\- bo.-q

'oioD(Ar c?t lrY

-0n0t1'\OrfttrnenlerS uJ\+h morLef galer orkj laeJ*e-c

floduct\cn ftrrcticns-1vtc'pu:Crflr,r" w,\t ,pfov,ba c'rty\ exha *P(rt,,t tklof

otW-f ftrwrS cY)+ suPP\\4

Ccurnur/ Slocl(Shef$ o\iQppott4 Mh\e \> Nosh eQurirbr\urot tTits rrcdet.mgp {bcuse $n se$sftq quoNlNes tl.rs\ AIe

\n+efdegencle(\ (guosSed)se.q. P. \Oo-zc

fWt2Oc derrx-rfS c$rvQ)o( S-tou-lP\,\C: ICO

Page 49: Microeconomic Theory Lecture Notes

-Monopotr4.P >MR=$Ac

-ConpErHl{€ Outccry'u.:

P=MQ4oo -2q. too

3oo = 26

r5O: occrnpP= $tooO'fcr CcrnPetl-rcn

. uQ gc,f rf€ficpor^{ \s ena-cletivofttvP 9q 1o611q1Qfl\^o

. Te,-P'Q-t\qr-24)0

Tq= \oO o-ZOaMR--\OO- \Q Cderrvct:t\Ve oelR\

'f,15= Ql!,2+ P

-7 siacretberg O ll(pptqro l, fttrns.. A tE

t_tOO-2e6: bo- lzP

Ml"=\OO

r.o fifv\ F. tNftVs C6t g ur\\ V\1yg Gg--qf(lfddr,r$r= 6-Qe

= ro-*ttttlP - 50Os. 156_r=p

.Prlce=HR--trc

Page 50: Microeconomic Theory Lecture Notes

hC,

-tcto\ te.u= P"G

Q=3eo-r.Q (inuee)Te= [3oo-24)Gr

S6-ZQ'= l€ TRMK.3OO -\Q

MA.=UC-

=. 3o0-\6- 16tr\@r

_b

Dcesrdr,tcA

tnrs s A+u:Xaat\ A th\Ors eB=rc-+trchero *til'\nEs Og=O, Qr=15

AB

l{s

tr-lr+

+ro{vnnq Ns cesfrrre frrnc\\d r(m o res,'s€ ftcrn q 'nr\g qLdlttttes Oi A qssum2sQts qu-.crrt\tre)

As r6Flc Curt/e

E -l$tsP= -16"t15'T5. \iQe5O^ Qs

- *oeFF=on- -O5t-15-G.n

Bsrfonse\li -4xfl53CJF: - l(JRil$r

qq:-6A

^)rx=n bc'tfi Pfsuastllq'rr 6ucn fcJsgfts€Rrr\\crn, th€L{'l(

QcOdUCe CLt a s\dbt€qucvlhtq, E.

TualtrBf\a\ o=lOfrice $nN(1et=$U)

e(rc-2G=Pp=t@

{@/so)

(16, o)

B(s tespdrta cuilQ

&t=-*qt

Page 51: Microeconomic Theory Lecture Notes

qJssp

ra.{..{cocq olisft']l'1 cwn6*( cn

''-J" v JG\^< (io{ (iqw.<.p.?v.) P" > P.fesponP oP N

neshec.(qilibri r{rr^

res?cns€ oeM

! AIB --AL}{Qn- =

AI$. SAG ALtMR\. tN\so\f$\

Qrcdurt

tS"". I

Q*,

e r ez -- 6 crigoqoy

Res.JsC€ l.,lN{-\<a+>\0bcf, rYlor-be.\

^,'rttt(!.rlQ \S ?efA3C-\ Ccjr^Vetit\o.\'\n \O\tr rnJtke+, MECFL = hlA4e.

'firm w'r(t 1L rf \{f,.> \,tELfrfvn r,ritr VL'\t HR'< ${€'LF rs o+ i\R'=ME.

4.,Dqrrlnd ta- t_qtm-qdd€d revenvJ- frqn^ tt\go{Itri\r oT oddcd osrreJt^n\ Y)e Ccyqperd L-o <s$!eDcos\- oe h\f\nq u\cc\ceJ'{ a rF MR.u )"MCu , SA_0n Se

tN$\ (4;Tc\.$$qlftvfi / \-au' S-W..(}u odd\\\oror Nc/rrer 6rtl b"

n\fQd

Page 52: Microeconomic Theory Lecture Notes

.s cctrnFhhVe fir* P

bt\^OncPet'

Mk=P

hR<P

M9t+ MofolrvJ\ ?tooUc* ot \robcr

UJ

t{3*

tL

{cr Lc,.bcr)

t"lR"rr-not te\euof* beaduse srrs v$tt \lot_ltfg fff LDrtt

,l,T,tflfi", trurs 'oe ncq3s\ve Loager

$6p ir UacoltSe \tis U,nstcrbie 0s tL t[lR !+L

afhoffe+ de,rnsrrd cLrfve \s tyw S,tvno€ o\\ c\errreodGr.r1q5 'ro ffSte+ t\ €\trn)uof\murnA qudnntq cF \Olod- (,.i't\ \oe de\ernitngd S-\

s

r li

|^CoP t-

\,DY\C{e H€a$u = l.{R o+L

Page 53: Microeconomic Theory Lecture Notes

+ Nf6tig MQ. SrrFtsz 1-.t 1,41\t\ CyEDpFib\^lYtl't Cd,rs€S MRr tO Srift-?

'r, IARu = MP' ' MR ME.

+Wrbrle Mt,nt,DotU rS \n ilt-er0ds MorkeF?'> R p>MR',+ P.$4R > MR " MP"

(vqru[ ot ( MF. of L)MP Or

VMPJa

vMPL ) l4A"

Mg,+t

L

'thr,tste$t{!O\Oqq c!f\'n$aGe I I :\ ..

defl]fc\c\aF\"6tocf I ::'un-,'Pnce oe PrOOuct (detrved dervw$) L<

" pr64utt\tr \ rrc{ eo SeS Cd'"r(o1\Cr\ I SK'|\\S \nFou eyy\en\s)

^) frpr€ cf otYur fescL\caes (oP\na\ )

6L! _CI6 \a-Ic-32J|{l\o' AL z -

douu\e whommq o€ o@\tc$hn,)d'*!- to wro.rcgor--1

'Fc,''Ae.-

r)dt.o t<) rnof\e?scrr1 rqo,sd

rlxtdrptcitoticn dcro <: Atrris rtsrcPoLq FL$e. lrr gcdsfrtsf\c€+-

$VMR-

L]Alz q

.N\o

+NY6t tQ Arw.rs CnU{ CLqer 06, t_rk ?rs Rfff\-mcfcpsq.\'.1 t

t,tCL

Su

NO$t r- vrJq

$tt.rl,* T:b|Aql r W1

tg.c\ec,.l

{$Ap

!\R.O.

Page 54: Microeconomic Theory Lecture Notes

'S*cptq c+ tabcr

Q\hts x-Jdoqs - \G8htrurslS-rrorn\d$4n'e- hcs

9O -> <tsn ep tc Lr]aK or \e\s\^(eiur.rCCrets rnr€r fim cpflmuw\ corqtr3 o€ utock +UeLXfg

lA-oU-2..1O.

- CcfnQ" '\n Gtrl\+ Conp.io r-Mh''l

E/A€N\dno Sec f'ucc

M€cf L\Al

MR.6FL = l (-"MPLLL*

r{

vlt\(

*hl

ficnopo\u1 \n eM . trtcnop\q \n C1tr,\ + [{mc$Sutt\ tn tMY{.

htgt$s"""+ f€of r.

Sr-

!Ec€1

kr VMP-

/i/

trqrvr to W(€

'L

t: t{Q,r- r-

Page 55: Microeconomic Theory Lecture Notes

-Sulp\t,1 c€ tcrbcr.+ tjmi teC $fr\e --t€\Sqfe> vssK teo_€\sqre\

te\sutret

J u.^rnnt ,tt,,,.,

hrrt ttncana- GC(Css Qocras)

ccnstfqt nr

-> NrEt \e u:clq%til (qo'reisue )

tb/t-s

€l8,rg zkhq9a'

r--------------+UOrhho,^S.

-Ncrgg- tas€s r pte(etonces- tuJegltvl\ fCnrr)Qge'rn6^<.

ar

AS rtcrqPt.-SqbS\\tr\\o^:

s\Y(e qr$,rKt\A\( Cosf 0P ldsue]s hl qhor,'rbltvlduol \Jl tt sulrttifut\nCO,r.r.S Tt{. \ASu(e, S0 tJGlc\sr.},rfl

- \nccvl^o'-NS te:rl. \rwrrr,r.!-l/

'lndivlOud uc\tl

WchOSP rrgre OS f\cvvy\rl go6d

e\Strfe 'lx1vq rBI lf,i\ r^ri\t \28.gurcttca.c2}r,r.oce. 4gr lSf l

toturC4?C+, ftorn €r trr€:Sab <zQtec+: €r rc \< ; \nttrru eeeai.- ktuq

- €.isufe

Page 56: Microeconomic Theory Lecture Notes

Q of \oD€r

4,fgdrAj llr\

-L'l-

arhGrs

-? Nectr\h trrn-r^soqta nccvvtct)

t€\Su€ \ lels(,re z

"onKJc\s

I lm.ffixns - gft/f\otes rsc\5jFs ur:errrbenn g"

LF\o"S,( bqfrw^.p cr$'/v1Y\/\N\k-lLl> nbol^\$Obte u(,v\c CmCtl-{n( '

UOIKe+

Page 57: Microeconomic Theory Lecture Notes

*>$utldso Kn0\E ot (crbq (\$ ltn\Cn \n O\)

-ffid ?btQOrrn: rcdu(e Lqctlc do{ b) d\o}rrnL\w\ \>h{sMQirmum rocrc tc \2e' Gddats€q*or ?o.q For eQuotqjO=.cnonge sctcrlorder -Wqceftd,t{, 'sr0t tY\rr furae.

l SUvnuOt QcrnPer U-o\ce aq:ctl'.( crks StNcted AFL- r,odn\ed Feoer<st [n\cr\s /decen-trcuiacttto^- uccrK u.Ji*hrn copitJ\t sl s1s\ em to \m[4cue u)4bers

ril. we[-bernq| ... --,,S. MRcPL = MR. nPu

- tecn*rol.1 t

Oz -w\ or e C<lpilor-t{O\n\ng r edotco\\c{)

L, r'PrcvuUre qAc. Prodr^c+!+ . {.lnrtq tne \mportottcrr

.r CtC -Ctdft,Lrn\tsus,

-\\cens\n4- edi.rce{rd'l g6 rnrf\$ laQu rrerrrnt

Page 58: Microeconomic Theory Lecture Notes

0t4.goiaE

--o*\**

to qzi to ?1G" , gJtlemmzfi+ ncac{stc c,p+rnvo\u€d (or drq a\I{ffic{\tq]

U

Q/tinnp.

horiz(n+cu. Euvn cF irc\vrdr.t'ctl* devrtdrYf q {\l?S qtSOsTrr3nket c\errr:rrd curv€ . << PRlvqTE CcoD>>

+QYFfdCt€:fl€\cS:tH0n€xclwwe leuuricaocrS + fiB:-{rdets: not fqlzc\!\og tnz\c,,,1.,1gpq-f\vol. J " geqres,fuYrng

tftf tn0r{'1\ rENe toMttqEF\'\og $aq fesuit<- €.i (r 1 r .

lr\ t{u-qgod rng( r€trQ ^pr0dlrcd cr uldec Soclred

"Dgnorld in Mo.cret is rha Vefttcot sctmo€ enz\crd\vldircil's de onct crrue.

. Publiq goods

sKee+tiqrtg

N\CT\CEtD.

MC

Dc Do

Dt'

,rr l-br"r: to Rtyrce ?-F€e€,

- Tq€S

o

Page 59: Microeconomic Theory Lecture Notes

.$n\-p'rrSttC Aocos

->chorLqet\stics'.rufKtt-ftVd\ru llr\t €xctu\Sive

=e.q: privot'e rrs)cv\ss /g3t€ corrtse

1, t]!O\nJnon-exc\usivq

-eq.9lshrnq gfoL'cds

' Ertenotitres -Qrr\ ouet>cfre eccrr,no( c occ\cns tovQsecct\ f:ersqr's €Cnt€r\t

ru conbe- Pcs\nv€_ I fi,$o+\v e

^)P0sltive..

o' beOr\ng Cn Orgqpt rsr\Ycr.,t ts

= tfCer$OctuceO itr P{r rc €-q Cxlv\eo

Wtrruuscclq+ tHytdlt

kll,t0-ftt=t^B

WlIr"- -- &iretq's Be4lAr

s)l\tli\Unv€ €rreiaO ti K4

n,tf\Z*S OCftCrr tv\s-tOv'N- Qefst-::

I nt^tox J P(

\ frot

subsrq\^ = nqoflve @x (f,F,-Ptqo-l.< o^"

crdu€rsY cet€-C\s

W\

J Pgdrrtq'

$ACpiote t{C soci crr = u(p(i /"rF r{C$CE

nrf,it\ CJc c^)(o tft-q

socte4 Y Price 694111[,@f = Pprod ttaX

Page 60: Microeconomic Theory Lecture Notes

Mg

et@nup +lQftcvQr pc\lutlc\(do(eQtcic^e)

.TmdecLlo\e PotrutrOn reffnr|- SUstem

E/oour*n-t breon qpt

+ecqen'tro,u.r^ Os,\qn\ng Fd+^i*\€+ pocFe$.{ rqnk k Fd[*\cftMc-q bltwttq.\, 3gsr tr.oits

noceptub€- :39_Ws'ibofirrns v'to(lnilr

rf 'tYL0re ls q duffdeJACQ, rn t4c, €s{fitrnN gol1s rrcrc thon R to aecn uP,f\fil\ A ur\\\ ff\ade rrlr\hQfrn Q

"C0ose Iv\ocre'"n-tr;3i+n rsetL-oeffrco pndreftq flgyt], yfttidre ps.t\Os uirr

reocn ccnsersqs Qt0ut EnffkJ\ po\w\dltvlCuvto,s.

MQ. > ltc G| ; aod\\ t3 (toqls

\AtNet\tsgopq-n\i11

nooca,er to kAqa,VGC- bistri qltt ye tSSLl4-

'tnsrsgflcn ostQ pru.rficrl

-mrd to pflng qle kT#rrur.-rod cLrt