• January 18, 2022
• admin

Theory of Consumer Demand

1.Cardinal Utility Approach

Topic discussed:

Cardinal Utility Approach
Assumptions
Single commodity Case
Consumer Equation in Multiple Commodity Case
Derivation of Demand curve

2.Indifference Curve Analysis and Utility function (Part 1): Rational Preferences, Diminishing MRS, Properties of Indifference Curves

Topic Discussed:

Indifference Curve Analysis and Utility Function
Consumption Set
Consumer Preference
Rationality Axioms
(i)Reflexivity
(ii)Complenes
(iii)Transitivity
(iv)Continuity
(v)Strict Monotonicity
(vi)Strict Convexity
Utility Representation
Indifference Curve and Marginal utility
Marginal Rate of Substitution
Properties of an Indifference Curve

3. Indifference Curve Analysis and Utility functions (Part 2) (Demand functions) (IES 2011, 2015, 2017, 2018, 2019, 2020)

Topics Discussed

1. Optimization Principle Utility Maximization
2. Budget Constraint
3. First order conditions for a maximum
4. Second order conditions
5. Perfect Substitutes

Past Year Questions Discussed in this class/recording

IES 2018, 9 (a)

IES 2015, Q 2

IES 2019, Q 2 (a)

IES 2011, Q 1 (b)

IES 2020, Q 3 (a)

IES 2019, Q 1 (a)

IES 2017, Q 9 (b)

4. Demand Functions | Neutrals | Economic Bads | Bliss Point (IES 2015)| Concave Preferences (IES 2021) |

Topic Discussed

1. Neutrals
2. Economic Bad
3. Bliss point/ Satiation point

Past Year Questions Discussed in this class/recording

IES 2015 Q 1(d)

IES 2021 Q 2(b)