https://gdpark.blog/tags/consumer-theory/Recent content in Consumer-Theory on gdpark.blogHugoenFri, 06 Jan 2017 00:00:00 +0000https://gdpark.blog/posts/microeconomics-09-indifference-curves-and-utility-functions/Thu, 14 Jul 2016 00:00:00 +0000https://gdpark.blog/posts/microeconomics-09-indifference-curves-and-utility-functions/We get into indifference curves and utility functions — why some baskets make you equally happy, and why piling on more stuff gives you less of a kick each time.https://gdpark.blog/posts/microeconomics-10-marginal-rate-of-substitution/Thu, 14 Jul 2016 00:00:00 +0000https://gdpark.blog/posts/microeconomics-10-marginal-rate-of-substitution/MRS is basically something we already know deep down — here’s why ∆y is always negative on the indifference curve, plus a Coke vs. Pepsi reality check on diminishing MRS.https://gdpark.blog/posts/microeconomics-11-special-utility-functions/Fri, 15 Jul 2016 00:00:00 +0000https://gdpark.blog/posts/microeconomics-11-special-utility-functions/We dive into the ‘special cases’ where diminishing marginal utility just doesn’t apply — perfect substitutes and perfect complements, with all their quirks!https://gdpark.blog/posts/microeconomics-12-utility-maximization/Fri, 15 Jul 2016 00:00:00 +0000https://gdpark.blog/posts/microeconomics-12-utility-maximization/Mr. Nodap’s got 10,000 won and a choice between booze and smokes — here’s how utility curves and the budget line team up to nail the one combo that maxes him out.https://gdpark.blog/posts/microeconomics-14-utility-maximization-with-coupons-and-subsidies/Fri, 15 Jul 2016 00:00:00 +0000https://gdpark.blog/posts/microeconomics-14-utility-maximization-with-coupons-and-subsidies/Walking through how government housing subsidies mess with your budget line — turns out it’s not as scary as it sounds, just a little funky shaped.https://gdpark.blog/posts/microeconomics-15-utility-maximization-under-a-membership-scheme/Fri, 15 Jul 2016 00:00:00 +0000https://gdpark.blog/posts/microeconomics-15-utility-maximization-under-a-membership-scheme/A fun walkthrough of how a membership fee shifts your budget line — and why some people are actually better off never joining in the first place.https://gdpark.blog/posts/microeconomics-18-engel-curve-and-income-consumption-curve/Sat, 16 Jul 2016 00:00:00 +0000https://gdpark.blog/posts/microeconomics-18-engel-curve-and-income-consumption-curve/We derive the income consumption curve and Engel curve step by step, then use their shapes to figure out whether a good is normal or inferior — think ramen vs. electricity.https://gdpark.blog/posts/microeconomics-19-substitution-effect-income-effect-inferior-goods-and-giffen/Sat, 16 Jul 2016 00:00:00 +0000https://gdpark.blog/posts/microeconomics-19-substitution-effect-income-effect-inferior-goods-and-giffen/We break down what actually happens when a price drops — splitting that bump in consumption into the substitution effect and the income effect, then going deep on inferior and Giffen goods.https://gdpark.blog/posts/microeconomics-47-chapter-5-practice-problems/Fri, 06 Jan 2017 00:00:00 +0000https://gdpark.blog/posts/microeconomics-47-chapter-5-practice-problems/Grinding through Chapter 5 consumer theory problems — price-consumption curves, Giffen goods, and utility optimization — one painful step at a time.