Revealed Preference Analysis Suppose we observe the demands (consumption choices) that a consumer makes for different budgets. This reveals information about the consumer's preferences. We can use this information to

Structure Utility function(效用函数) Definition Monotonic transformation(单调转换) Examples of utility functions and their indifference curves Marginal utility(边际效用) Marginal rate of substitution边际替代率 MRS after monotonic transformation

Structure Describing technologies Production set or technology set Production function Isoquant Marginal product Returns to scale Technical rate of substitution well- behaved technologies Long run and short run

Structure The cost minimization problem Average costs Returns to scale and total and average costs Short run and long run costs

Structure Types of cost curves Fixed, variable and total cost functions Average fixed, average variable and average cost functions Marginal cost functions Marginal and variable cost functions Marginal and average cost functions Short run and long run cost curves

Structure From Individual to Market Demand Functions Elasticities Revenue and ownprice- elasticity of demand Marginal revenue and price elasticity

Structure on -collusive- moves Simultaneous moves Quantity competition -Cournot model Price competition- Bertrand model Sequential moves Quantity leadership- Stakelberg model Price leadership Collusion

Structure Definition Consumption externality Production externality The tragedy of commons

Mission of Economists Gary Becker: believe that the main purpose of economics is to understand and help to alleviate poverty\ Who are the poor? How can one help?

How Should a Monopoly Price? So far a monopoly has been thought of as a firm which has to sell its product at the same price to every customer. This is uniform pricing. Can price-discrimination-(差别定价 ) earn monopoly higher profits?