Chapter 5

Applications of Rational Choice and

Demand Theories

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 Fig. 5.1

A Gasoline Tax and Rebate

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 Fig. 5.2

Educational Choice Under

the Current System

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 Fig. 5.3

Educational Choice Under a

Voucher System

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 Fig. 5.4

The Demand Curve Measure

of Consumer Surplus

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 Fig. 5.5

The Loss in Consumer Surplus from

an Oil Price Increase

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 Fig. 5.6

An Individual Demand Curve

for Tennis Court Time

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 Fig. 5.7

Budget Constraints for 2 Years

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 Fig. 5.8

Rising Housing Prices and the

Welfare of Homeowners

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 Fig. 5.9

Falling Housing Prices and the

Welfare of Homeowners

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 Fig. 5.10

The Bias Inherent in the

Consumer Price Index

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 Fig. 5.11

The Marta Fare Increase

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 Fig. 5.12

Intertemporal Consumption
Bundles

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 Fig. 5.13

The Intertemporal Budget

Constraint

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 Fig. 5.14

Intertemporal Budget Constraint

with Income in Both Periods…

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 Fig. 5.15

An Intertemporal Indifference Map

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 Fig. 5.16

The Optimal Intertemporal

Allocation

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 Fig. 5.17

Patience and Impatience

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 Fig. 5.18

The Effect of a Rise

in the Interest Rate

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 Fig. 5.19

Permanent Income, not

Current Income…

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 Fig. 5.20

Level versus Growing

Consumption Profiles

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