EC370 A and B Intermediate Microeconomics II - presentation - for students 2026 Wilfrid Laurier University
Road Map
Choice Theory General Equilibrium Structural Market Refinements
Theory Failure
The Utility Model Competitive Perfect Competition Externalities
Economy
(Exchange) Monopoly
Intertemporal Public Commodities
Competitive Cartel
Choice
Economy
(Production)
Choice under risk Welfare Game Theory Asymmetry
Fall 2025 Intermediate Microeconomics II (EC370 A and B) 1
, conditions Information
Fall 2025 Intermediate Microeconomics II (EC370 A and B) 2
, Intertemporal Choice
• Considering: one commodity, two time periods (“1” is the present and “2” is the future), the consumption in
the periods 𝑐1, 𝑐2 that are “good” commodities, the money in the periods 𝑚1, 𝑚2 .
• Assuming: it’s impossible to transfer money from the present to the future.
• Question: what would be the budget in both periods?
• Answer: 𝑐1, 𝑐2 = 𝑚1, 𝑚2
• Explanation: the consumer consumes all their money in each period.
𝑚1 𝑐1
Fall 2025 Intermediate Microeconomics II (EC370 A and B) 3
, Intertemporal Choice
• Considering: one commodity, two time periods (“1” is the present and “2” is the future), the consumption in
the periods 𝑐1, 𝑐2 , the money in the periods 𝑚1, 𝑚2 .
• Assuming: there is only money transfer between the present to the future (by saving, with zero rate
𝑐2
interest). 𝑚1 + 𝑚2
• Question: what would be the budget in both periods?
𝑚2
• Answer: 𝑐1, 𝑐2 = 𝑐1, 𝑚1 + 𝑚2 − 𝑐1 , 0 ≤ 𝑐1 ≤ 𝑚1
• Explanation: the consumer consumes a combination of the amount of
money in both periods, as long as it’s less than the money in the present.
𝑚1 𝑐1
Fall 2025 Intermediate Microeconomics II (EC370 A and B) 4
Road Map
Choice Theory General Equilibrium Structural Market Refinements
Theory Failure
The Utility Model Competitive Perfect Competition Externalities
Economy
(Exchange) Monopoly
Intertemporal Public Commodities
Competitive Cartel
Choice
Economy
(Production)
Choice under risk Welfare Game Theory Asymmetry
Fall 2025 Intermediate Microeconomics II (EC370 A and B) 1
, conditions Information
Fall 2025 Intermediate Microeconomics II (EC370 A and B) 2
, Intertemporal Choice
• Considering: one commodity, two time periods (“1” is the present and “2” is the future), the consumption in
the periods 𝑐1, 𝑐2 that are “good” commodities, the money in the periods 𝑚1, 𝑚2 .
• Assuming: it’s impossible to transfer money from the present to the future.
• Question: what would be the budget in both periods?
• Answer: 𝑐1, 𝑐2 = 𝑚1, 𝑚2
• Explanation: the consumer consumes all their money in each period.
𝑚1 𝑐1
Fall 2025 Intermediate Microeconomics II (EC370 A and B) 3
, Intertemporal Choice
• Considering: one commodity, two time periods (“1” is the present and “2” is the future), the consumption in
the periods 𝑐1, 𝑐2 , the money in the periods 𝑚1, 𝑚2 .
• Assuming: there is only money transfer between the present to the future (by saving, with zero rate
𝑐2
interest). 𝑚1 + 𝑚2
• Question: what would be the budget in both periods?
𝑚2
• Answer: 𝑐1, 𝑐2 = 𝑐1, 𝑚1 + 𝑚2 − 𝑐1 , 0 ≤ 𝑐1 ≤ 𝑚1
• Explanation: the consumer consumes a combination of the amount of
money in both periods, as long as it’s less than the money in the present.
𝑚1 𝑐1
Fall 2025 Intermediate Microeconomics II (EC370 A and B) 4
