ECO100 Lecture Notes - Substitute Good, Budget Constraint, Engel Curve
Document Summary
Today, we are going to complete our discussion of consumer choice by actually coming back and deriving the demand curve that we started the semester with. I"m going to spend the rest of lecture then talking about the elasticity of demand, what determines the shape of that demand curve. I "ll talk about how changes in income affect demand. and then, we"ll come back and talk about the effects of a price change. the price of cookies rose to $ 9, and the budget constraint has steepened The only way to change the indifference curve would be to change utility function Indifference curves purely come from this part of the budget constraint. but indifference curves you ca n"t really add up. but if we want to add up people, you would add up demand curves What would drive a good to very, very elastic demand in general. [unk] nothing "s ever perfectly elastic. but things which have very good substitutes.
