1. 6. Fundamental Concepts of Microeconomics
Objectives and Methods of Microeconomics
The Consumer
The Firm
The Market
Basic Issues in Welfare Economics
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2. 6.1 Objectives and Methods of Microeconomics
Art Work 1: David Dalla Venezia, No. 269, Oil on Canvas, 2000
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3. Conflict Resolution and Coordination
Art Work 2: Theater Bonn, Germany, FRIDA KAHLO, Photo: Thilo Beu.
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4. Economics for Environmental Studies
6.2 The Consumer
Fig. 6.1 The individual demand curve
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5. Economics for Environmental Studies
Increasing Income
Fig. 6.2 Comparative static analysis of demand as income increases
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6.3 The Firm
Fig. 6.3 Equilibrium output decision of a perfectly competitive firm
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Equilibrium Supply
Fig. 6.4 Equilibrium supply for alternative prices
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Supply Curve
Fig. 6.5 The supply curve of the firm
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9. Comparative Statics of Supply
Fig. 6.6 Comparative static analysis of the individual supply curve
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6.4 The Market
Fig. 6.7 Deriving the market demand curve by horizontal aggregation of the individual demand curves
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Market Supply
Fig. 6.8 Deriving the market supply curve by horizontal aggregation of individual supply curves
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Market Equilibrium
Fig. 6.9 Market equilibrium
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13. Comparative Statics of Equilibrium
Fig Comparative static analysis of the market equilibrium
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14. 6.5 Basic Issues in Welfare Economics
Fig Socially optimal and perfectly competitive level of production
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15. Inter-firm Allocation
Fig Cost-effective inter-firm allocation
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16. Inter-consumer Allocation
Fig “Benefit-effective” inter-consumer allocation
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17. Economics for Environmental Studies
Market Failure
Fig Market failure due to negative externalities
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