There were no slides today. I forgot to post the answers to quiz 3 yesterday but they are up now. If you want to go over the quizzes again, open these links and scroll down…
During today's class, we went over…
—- zero-cost monopoly pricing,
—- using the formula spending = quantity x price for budget questions,
—- using supply and demand elasticities to determine the impact of a tax on (i) how much is paid by consumers after the tax and (ii) how much is paid to suppliers after the tax (these numbers are not the same! the difference between them is equal to the tax),
—- solving the Consumer Choice problem for Cobb-Douglas preferences either by (i) matching slopes or (ii) computing budget shares,
—- graphing preferences for perfect substitutes and perfect complements,
—- knowing what a consumer with perfect substitutes preferences will choose (just one good or the other), and
—- knowing what a consumer with perfect complements preferences will choose (both goods in their preferred ratio).
I didn't get to a couple of other topics:
—- Categories of goods (inferior vs normal, luxury vs necessity, complement vs substitute)
—- [This is not a big part of the test…] Assumptions made on preferences and what their definitions look like (completeness, transitivity, strict monotonicity, continuity, strict convexity)
—- Recap of Supply shifters (technology, etc.) and Demand shifters (income, etc.) and special cases (the outcome Supply and Demand do not intersect, or shifts when one of them is vertical/perfectly inelastic)
Send me an email if something needs clarification. I'm thinking of moving my 2-4 office hours to 3-5 starting next week, as several students have class until after 3. Let me know if that would be a problem.