AMI_Note 2:Choice-based approach to demand

1.Some basic concepts

Commodity buddle, Consumption set, Walrasian or competitive budget set

2.Walrasian demand function: Homogeneous of degree zero.

Walras' law: for any p>> 0,and w>0, p•x（p,w）=w.

3.Income effect——Normal good Inferior good. Price effect ——Giffen good

4.Some equations

\sum e_｛l,k｝（p,k）+e_｛l,w｝（p,w）=0

Cournot aggregation; Engel aggregation.

（The proof of above equations.）

5.Walrasian demand fn.  and WARP（by mathematics and by graph）

6.Compensated Price chang （Slutsky Compensation） ;  CWARP（By mathematics and by graph）

7.The relationship between WARP and CWARP （Under Walras' law）&Proof*

8.Compensated law of demand and Slutsky matrix.