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I. UNIT I

I. UNIT I. B. CONSUMER BEHAVIOR AND UTILITY. MAXIMIZATION. 1. The law of diminishing. marginal utility. 2. Derivation of demand-----. the equimarginal principle. 3. The substitution effect. 4. The income effect. Joe's Weekly Demand for Steak. Price Quantity Demanded.

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I. UNIT I

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  1. I. UNIT I . . B. CONSUMER BEHAVIOR AND UTILITY MAXIMIZATION 1. The law of diminishing marginal utility 2. Derivation of demand----- the equimarginal principle 3. The substitution effect 4. The income effect

  2. Joe's Weekly Demand for Steak Price Quantity Demanded $2 1 lb. 1 2 lbs.

  3. Joe's Weekly Demand for Steak Price Quantity Demanded $2 1 lb. 1 2 lbs. Price down, Joe can afford more. Price up, Joe can afford less.

  4. I. UNIT I . . B. CONSUMER BEHAVIOR AND UTILITY MAXIMIZATION 1. The law of diminishing marginal utility 2. Derivation of demand----- the equimarginal principle 3. The substitution effect 4. The income effect

  5. Joe's Weekly Demand for Steak Price Quantity Demanded $2 1 lb. 1 2 lbs. Joe thinks that Spam is a really good close substitute for steak and the price of Spam is 25 cents per pound.

  6. Joe's Weekly Demand for Steak Price Quantity Demanded $2 1 lb. 1 2 lbs. Joe thinks that Spam is a really good close substitute for steak ...P of Spam = 25 cents/lb. If P of steak is $2, a pound of steak costs 8 lbs of Spam.

  7. Joe's Weekly Demand for Steak Price Quantity Demanded $2 1 lb. 1 2 lbs. Joe thinks that Spam is a really good close substitute for steak ...P of Spam = 25 cents/lb. If P of steak is $2, a pound of steak costs 8 lbs of Spam. If P of steak falls to $1 per pound, a pound of steak costs 4 lbs of Spam. As a result, Joe will..........

  8. Joe's Weekly Demand for Steak Price Quantity Demanded $2 1 lb. 1 2 lbs. Joe thinks that Spam is a really good close substitute for steak ...P of Spam = 25 cents/lb. If P of steak is $1, a pound of steak costs 4 lbs of Spam.

  9. Joe's Weekly Demand for Steak Price Quantity Demanded $2 1 lb. 1 2 lbs. Joe thinks that Spam is a really good close substitute for steak ...P of Spam = 25 cents/lb. If P of steak is $1, a pound of steak costs 4 lbs of Spam. If P of steak rises to $2 per pound, a pound of steak costs 8 lbs of Spam. As a result, Joe will..........

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