1. Chapter 12
Uncertainty

2. Utilities and probabilities.
Expected utility functions, or
von Neumann-Morgenstern
utility functions.
They are indifferent up to
any positive affine transformation.
(affine transformation: y = a + bx).

3. Risk aversion and risk loving.U U $ $
Concave vs convex utility.
The second derivatives.

4. Chapter 14
Consumer’s surplus

5. 消费者得益 r1 r2
总收益 r3 p r4 r5 r6
Consumers’ Surplus p246

6. Producer’s surplus p255 P
Producer’s surplus P*
Supply curve Q* Q

7. Change in producer’s surplus
Supply curve R T P’
Q’’ Q Q’

8. The water-diamond paradoxPd Pw Q

9. Calculating gains and lossesB T
Change in consumers’ surplus