Reading Guide

Reading Guide for Unit 5

Chapter and sections in Taylor to Read

Pg #

Comments/Assignment

8 Household Decision Making
151
  Consumption Choices 151 Read – ImportantPages 151-156 are most important.  The top of page 156 is critical.  
  Total Utility and Diminishing Marginal Utility 153  
Choosing with Marginal Utility 154  
A Rule for Maximizing Utility 155  
Measuring Utility with Numbers 156  
How Changes in Income and Prices Affect Consumption Choices 156  
  How Changes in Income Affect Consumer Choices 157  
How Price Changes Affect Consumer Choices 158  
The Foundations of Demand Curves 159  
Applications in Business and Government 161  
Labor-Leisure Choices 162 optional – interesting reading, particulary for business majors, but not on test  
  The Labor-Leisure Budget Constraint 163  
Applications of Utility Maximizing with the Labor-Leisure Budget Constraint 164  
Intertemporal Choices in Financial Capital Markets 165  
  Using Marginal Utility to Make Intertemporal Choices 166  
Applications of the Model of Intertemporal Choice 168  
The Unifying Power of the Utility-Maximizing Budget Set Framework 170    
Key Concepts and Summary 170    
Review Questions 171