Slide 1 : 3/19/2011 dntjnv@yahoo.co.in INTRODUCTION OF THE IC ANALYSIS
BY:-D.N.TIWARI PGT (ECO)
JNV BAHRAICH UP Y
Slide 2 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.01a Bundles of Pizzas and Burritos Lisa Might Consume B , Burritos per semester (a) Ranking Regions 30 25 15 Z , Pizzas per semester 25 20 15 10 0 d a b e c f A B
Slide 3 : 3/19/2011 dntjnv@yahoo.co.in Bundles of Pizzas and BURGERS RAMESH Might Consume Y BURGERS per semester (b) Indifference Curve 30 25 15 Z , Pizzas per semester 25 20 15 10 0 d a b I e c f X
Slide 4 : 2009 dntjnv@yahoo.co.in Figure 4.01c Bundles of Pizzas and Burritos Lisa Might Consume B , Burritos per semester (c) Preference Map 30 25 15 Z , Pizzas per semester 25 20 15 10 0 d I 0 I 1 I 2 e c f
Slide 5 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.02a Impossible Indifference Curves B , Burritos per semester (a) Crossing Z , Pizzas per semester I 1 I 0 a b e
Slide 6 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.02b Impossible Indifference Curves B , Burritos per semester (b) Upward Sloping Z , Pizzas per semester I a b
Slide 7 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.02c Impossible Indifference Curves B , Burritos per semester a b (c) Thick Z , Pizzas per semester I
Slide 8 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.03a Marginal Rate of Substitution B , Burritos per semester (a) Indifference Curve Convex to the Origin 5 3 8 1 – 1 1 1 2 0 – 2 – 3 3 4 5 6 Z , Pizzas per semester a b c d I
Slide 9 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.03b Marginal Rate of Substitution B , Burritos per semester (b) Indifference Curve Concave to the Origin 5 7 1 1 2 0 – 2 – 3 3 4 5 6 Z , Pizzas per semester a b c I
Slide 10 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.04a Perfect Substitutes, Perfect Complements,
Imperfect Substitutes Coke, Cans per week (a) Perfect Substitutes 1 2 3 4 Pepsi, Cans per week 1 0 2 3 4 I 1 I 2 I 3 I 4
Slide 11 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.04b Perfect Substitutes, Perfect Complements,
Imperfect Substitutes Ice cream, Scoops per week (b) Perfect Complements 1 2 3 Pie, Slices per week 1 2 3 0 I 1 I 2 I 3 a d e c b
Slide 12 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.04c Perfect Substitutes, Perfect Complements,
Imperfect Substitutes B , Burritos per semester (c) Imperfect Substitutes Z , Pizzas per semester I
Slide 13 : 3/19/2011 dntjnv@yahoo.co.in Application Indifference Curves Between Food and Clothing Food at home per year Clothing per year I 4 I 3 I 2 I 1
Slide 14 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.05a Utility and Marginal Utility U , Utils D U = 20 Utility function, U (10, Z ) D Z = 1 10 9 8 7 6 5 4 3 2 1 Z , Pizzas per semester 0 350 250 (a) Utility 230
Slide 15 : 3/19/2011 dntjnv@yahoo.co.in , Marginal Figure 4.05b Utility and Marginal Utility MU Z utility of pizza MU Z 10 9 8 7 6 5 4 3 2 1 Z , Pizzas per semester 0 130 (b) Marginal Utility 20
Slide 16 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.06 Budget Constraint B , Burritos per semester Opportunity set 50 = Y / p Z L 1 ( p Z = $1, Y = $50) 25 = Y / p B 20 10 10 0 30 Z , Pizzas per semester a b c d
Slide 17 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.07a Changes in the Budget Constraint B , Burritos per semester (a) Price of Pizza Doubles Loss 50 L 1 ( p Z = $1) L 2 ( p Z = $2) 25 25 0 Z , Pizzas per semester
Slide 18 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.07b Changes in the Budget Constraint B , Burritos per semester (b) Income Doubles Gain 100 L 3 ( Y = $100) L 1 ( Y = $50) 50 25 50 0 Z , Pizzas per semester
Slide 19 : 3/19/2011 dntjnv@yahoo.co.in Solved Problem 4.2 Other goods per week 10 0 12 Gasoline, Gallons per week Budget line Quota A B
Slide 20 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.08a Consumer Maximization B , Burritos per semester (a) Interior Solution Budget line 10 20 25 50 30 10 0 Z , Pizzas per semester I 1 I 2 I 3 d f c e a g A B
Slide 21 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.08b Consumer Maximization B , Burritos per semester (b) Corner Solution Budget line 25 50 Z , Pizzas per semester I 1 I 2 I 3 e
Slide 22 : 3/19/2011 dntjnv@yahoo.co.in Solved Problem 4.3 Local books per month Y / p Y / p * Y / p Internet books per month e L L * I 1 I 2
Slide 23 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.09a Optimal Bundles on Convex Sections of Indifference
Curves B , Burritos per semester (a) Strictly Concave Indifference Curves Z , Pizzas per semester e d I 2 I 1 I 3 Budget line
Slide 24 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.09b Optimal Bundles on Convex Sections of Indifference
Curves e d I 2 I 1 B , Burritos per semester (b) Concave and Convex Indifference Curves Z , Pizzas per semester Budget line
Slide 25 : 3/19/2011 dntjnv@yahoo.co.in Solved Problem 4.4 French meals per year American meals per year a f L A L F I 1 I 2
Slide 26 : 3/19/2011 dntjnv@yahoo.co.in Figure 4.10 Food Stamps Versus Cash All other goods per month Y Y + 100 Y + 100 0 100 Food per month Budget line with food stamps Budget line with cash Original budget line A B f d e Y C I 1 I 2 I 3
Slide 27 : 3/19/2011 dntjnv@yahoo.co.in THANK YOU