Let's consider first a simple model for apartments in a college. Here we are interested to predict the prices of the rooms, and how we can allocate them to students. For simplicity, we will assume that they are all equal except for the location, which could be inner or outer.…
Here we analyze how demand changes when prices and income changes. Types of Goods # Here we will define two main types of Goods: Normal Goods : The demand increases linearly with the income. Inferior or Ordinary Goods : The demand decreases when the income is higher, one example…
We start from preferences what people want, and how to translate it into maths so that they can drive demand curves. This should be very similar to the Von Neumann-Morgestern notes. This is the utility function. We have a different set of assumptions between different Morgestern…