can-celebi.github.io/micro-business/L05
microeconomics · lecture 5 · open on your laptop
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microeconomics
040184 · ws 2026/27 · lecture 5
the budget set
before we start
problem set 2: how hard?
your answers from the survey ·
problem set 2: how hard is each question?
average · 1 very easy … 5 very hard (without 'not tried yet')
today: can you do it?
average · 1 not at all … 5 yes, easily
pen and paper
your answers from the survey ·
how often do you write with a pen?
% of you
pen and paper when you study
% of you
pen and paper to solve problems
% of you
notes and the board
your answers from the survey ·
how you take notes
% of you
paper or a notebook with you now?
% of you
a pen with you now?
% of you
taking notes, the board
average · 1 not at all … 5 very
sign in
Tap 👤 at the top of the slides: name, surname, nickname, and whether you are in class or online.
rational choice A1–A2
rational choice: consistent choices across contexts
the two steps: what you can afford (budget set), what you like (preferences)
a bundle (x, y) and flows (per month)
influencer budget line A3
story
you run an AI influencer account
x
AI videos
px = €3
y
paid ads
py = €5
B
€60 a month
we findhow well do you understand it? 1 = no idea · 5 = fully
1the budget line
2the ends of the line
3is (6, 4) affordable?
4the slope: rise over run
influencer three forms B1
x
AI videos
px = €3
y
paid ads
py = €5
B
€60
we findhow well do you understand it? 1 = no idea · 5 = fully
1standard form pxx + pyy = B
2slope–intercept form y = Bpy − pxpy x
3intercept form xB / px + yB / py = 1
influencer shift or rotation B2–B3
story
your AI influencer account
x
AI videos
y
paid ads
line a
B = €60
px = €6, py = €6
line b
income doubles: B = €120
px = €6, py = €6
line c
AI videos get cheaper: B = €120
px = €4, py = €6
we findhow well do you understand it? 1 = no idea · 5 = fully
1the ends and the equation of each line
2from line a to line b: shift or rotation?
3from line b to line c: shift or rotation?
4the slope of each line: rise over run
influencer composite good C1
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
we findhow well do you understand it? 1 = no idea · 5 = fully
1the composite good: y = everything else, py = 1 (numéraire)
2the budget line y = …
3the ends of the line
4the slope
influencer richer M1
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
changeB = €90
we findhow well do you understand it? 1 = no idea · 5 = fully
1the new budget line y = …
2the ends of the new line
3shift or rotation?
influencer cheaper video M2
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
changepx = €2
we findhow well do you understand it? 1 = no idea · 5 = fully
1the new budget line y = …
2the ends of the new line
3shift or rotation? around which point?
influencer pricier video M3
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
changepx = €4
we findhow well do you understand it? 1 = no idea · 5 = fully
1the new budget line y = …
2the ends of the new line
3shift or rotation?
influencer everything doubles M4
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
changeB = €120 · px = €6 · py = 2
we findhow well do you understand it? 1 = no idea · 5 = fully
1the new budget line y = …
2what changes?
influencer video tax M5
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
changea tax of €1 on every AI video
we findhow well do you understand it? 1 = no idea · 5 = fully
1the new price of a video
2the new budget line y = …
3shift or rotation?
influencer lump-sum tax M6
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
changea lump-sum tax of €15 a month
we findhow well do you understand it? 1 = no idea · 5 = fully
1the new budget
2the new budget line y = …
3shift or rotation?
influencer kink M7
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
changethe first 10 videos cost €3 each, every video after that €6
we findhow well do you understand it? 1 = no idea · 5 = fully
1the line up to 10 videos
2the kink point
3the line after the kink: y = a − 6x
4where the line ends on the x-axis
influencer Pro plan M8
story
you run an AI influencer account
x
AI videos
px = €3
y
everything else (composite good, €)
py = 1
B
€60 a month
changePro plan €12 a month + €1.50 per video
we findhow well do you understand it? 1 = no idea · 5 = fully
1the Pro plan line y = …
2where the two lines cross
3which plan is cheaper, for how many videos?
headphones endowment N1
story
brands send your influencer 10 headphones a month; you can resell them
x
headphones you keep
px = €100 (resale)
y
everything else (composite good, €)
py = 1
no cash
you own 10 headphones (the endowment)
we findhow well do you understand it? 1 = no idea · 5 = fully
1the budget B: what the endowment is worth
2the budget line y = …
3where is the endowment on the line?
headphones resale up N2
story
brands send your influencer 10 headphones a month; you can resell them
x
headphones you keep
px = €100 (resale)
y
everything else (composite good, €)
py = 1
no cash
you own 10 headphones (the endowment)
changeresale price px = €150
we findhow well do you understand it? 1 = no idea · 5 = fully
1the new budget B
2the new budget line y = …
3which point stays fixed?
4and if the resale price falls to €50?