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The Theory of Individual Behavior


Headline: Packaging Firm Uses Overtime Pay to Overcome Labor Shortage

I.

Introduction

II.

Consumer Behavior

III.

Constraints

A.

The Budget Constraint

B.

Changes in Income

C.

Changes in Prices

IV.

Consumer Equilibrium

V.

Comparative Statics

A.

Price Changes and Consumer Behavior

B.

Income Changes and Consumer Behavior

C.

Substitution and Income Effects

VI.

Applications of Indifference Curve Analysis

A.

Choices by Consumers

1.

Buy One, Get One Free

2.

Cash Gifts, In-Kind Gifts, and Gift Certificates

B.

Choices by Workers and Managers

1.

A Simplified Model of Income-Leisure Choice

2.

The Decisions of Managers

VII.

The Relationship between Indifference Curve Analysis and Demand Curves

A.

Individual Demand

B.

Market Demand

VIII.

Answering the Headline

IX.

Summary

X.

Key Terms and Concepts

XI.

Conceptual and Computational Questions

XII.

Problems and Applications

XIII.

Case-Based Exercises

XIV.

Selected Readings

XV.

Appendix: A Calculus Approach to Individual Behavior











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