Lesson plan
Demand set
A demand set is a model of the most-preferred bundle of goods an agent can afford. The set is a function of the preference relation for this agent, the prices of goods, and the agent's endowment. Assuming the agent cannot have a negative quantity of any good, the demand set can be characterized this way: Define L as the number of goods the agent might receive an allocation of. An allocation to the agent is an element of the space \mathbb{R}_+^L ; that is, the space of nonnegative real vectors of dimension L . Define \succeq_p as a weak preference relation over goods; that is, x \succeq_p x' states that the allocation vector x is weakly preferred to x' . Let e be a vector representing the quantities of the agent's endowment of each possible good, and p be a vector of prices for those goods. Let D(\succeq_p,p,e) denote the demand set. Then: D(\succeq_p,p,e) := \{x: p_x \leq p_e ~~~and~~~ p_{x'}\leq p_e \implies x'\preceq_p x \} .
Article summary
A demand set is a model of the most-preferred bundle of goods an agent can afford. The set is a function of the preference relation for this agent, the prices of goods, and the agent's endowment. Assuming the agent cannot have a negative quantity of any good, the demand set can be characterized this way: Define L as the number of goods the agent might receive an allocation of. An allocation to the agent is an element of the space \mathbb{R}_+^L ; that is, the space of nonnegative real vectors of dimension L . Define \succeq_p as a weak preference relation over goods; that is, x \succeq_p x' states that the allocation vector x is weakly preferred to x' . Let e be a vector representing the quantities of the agent's endowment of each possible good, and p be a vector of prices for those goods. Let D(\succeq_p,p,e) denote the demand set. Then: D(\succeq_p,p,e) := \{x: p_x \leq p_e ~~~and~~~ p_{x'}\leq p_e \implies x'\preceq_p x \} .
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Discussion questions
- Summarise the article in your own words. Which single claim would you verify first, and why?
- Which claim in this article is most likely to be revised as the sources update? How would you check its current status?
- If two sources disagreed about one of these facts, what would you need in order to trust one over the other?
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Key claims and bibliography are generated from the same tracked claims and sources as the article page.