Micro Economics (Theory of Consumer Behavior)
This Exam Covers the Following Topics.
- Utility Analysis
- Cardinal Utility Analysis
- Ordinal Utility Analysis
- Total Utility and Marginal Utility
- Law of Diminishing Marginal Utility
- Indifference Curve Analysis
- Definition and Properties of Indifference Curves
- Marginal Rate of Substitution (MRS)
- Indifference Map
- Perfect Substitutes and Complements
- Budget Constraints
- Budget Line and its Properties
- Shifts in Budget Line
- Changes in Income and Prices
- Consumer’s Optimum Choice
- Consumer Equilibrium
- Conditions for Consumer Equilibrium
- Tangency Condition between Budget Line and Indifference Curve
- Effect of Changes in Income and Prices on Consumer Equilibrium
- Demand Theory
- Law of Demand
- Movement along the Demand Curve
- Shifts in the Demand Curve
- Elasticity of Demand
- Price Elasticity of Demand
- Income Elasticity of Demand
- Cross Elasticity of Demand
- Types of Goods
- Normal Goods
- Inferior Goods
- Giffen Goods
- Luxury Goods
- Substitute and Complementary Goods
- Income and Substitution Effects
- Decomposition of Price Effect
- Hicksian and Slutsky Approaches
- Revealed Preference Theory
- Basic Assumptions and Axioms
- Weak Axiom of Revealed Preference (WARP)
- Strong Axiom of Revealed Preference (SARP)
- Consumer Surplus
- Definition and Calculation
- Changes in Consumer Surplus
- Engel Curves
- Relationship between Income and Quantity Demanded
- Graphical Representation of Engel Curves
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