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A Course in Microeconomic Theory$
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David M. Kreps

Print publication date: 2020

Print ISBN-13: 9780691202754

Published to Princeton Scholarship Online: May 2021

DOI: 10.23943/princeton/9780691202754.001.0001

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PRINTED FROM PRINCETON SCHOLARSHIP ONLINE (www.princeton.universitypressscholarship.com). (c) Copyright Princeton University Press, 2021. All Rights Reserved. An individual user may print out a PDF of a single chapter of a monograph in PRSO for personal use.date: 25 September 2021

An overview

An overview

Chapter:
(p.3) Chapter One An overview
Source:
(p.iii) A Course in Microeconomic theory
Author(s):

David M. Kreps

Publisher:
Princeton University Press
DOI:10.23943/princeton/9780691202754.003.0001

This chapter provides an overview of some basic concepts and philosophy in microeconomic theory. Microeconomic theory concerns the behavior of individual economic actors and the aggregation of their actions in different institutional frameworks. This description introduces four categories: the individual actor, traditionally either a consumer or a firm; the behavior of the actor, traditionally utility maximization by consumers and profit maximization by firms; an institutional framework, which describes what options the individual actors have and what outcomes they receive as a function of the actions of others, traditionally the price mechanism in an impersonal marketplace; and the mode of analysis for modeling how the various actors' behaviors will aggregate within a given framework, traditionally equilibrium analysis. Ultimately, the purpose of microeconomic theory is to provide a better understanding of economic activity and outcomes. The chapter then considers the levels of scope, detail, emphasis, and complexity of the theories and models presented in the book.

Keywords:   microeconomic theory, individual economic actors, utility maximization, profit maximization, institutional frameworks, price mechanism, equilibrium analysis, economic activity, economic outcomes

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