中级微观经济学(中山大学)

MICROECONOMICSClassroomLectureNotes(3credits,asof2004)basedonHalR.Varian’sIntermediateMicroeconomics,SixthEdition,referringtoPindyckandRubinfeld’sMicroeconomics,FourthEdition.Chapter0Thesourceofalleconomicproblemsisscarcity.Problemoftrade-off,andchoice.Economics,asawayofthinking,asadismalscience.Problems-solutions-hiddenconsequences.Maindecision-makingagents:1individuals(household),2firms,and3governments.Objectsofeconomicchoicearecommodities,includinggoodsandservices.Maineconomicactivities:Consumption,Production,andExchange.Microeconomicsandmacroeconomics:toshowthemarketmechanism(theinvisiblehand),tosupplementit.Thecircularflowofeconomicactivities.productmarketfactormarketTheproductmarketandthefactormarket.Themarketrelationismutualandvoluntary.Positiveissuesandnormativeissues.MarginalanalysisRelationsbetweenTotalmagnitudes,Averagemagnitudes,andMarginalmagnitudes.1,MMistheslopeoftheTMcurve;2,AMistheslopeoftherayfromtheorigintothepointattheTMcurve;TMMM(x*)AM(x*)x*x3,TMincreasing(decreasing)ifandonlyifMM0(MM0);4,IfTMisatmaximumorminimum,thenMM=0;5,AMincreasing(decreasing)ifandonlyifMMAM(MMAM);6,IfAMisatmaximumorminimum,thenMM=AM,orMMcutsAMatthelatter’smaximumorminimum.Chapter1EconomicsproceedsbydevelopingModelsofsocialphenomena.Byamodelwemeanasimplifiedrepresentationofreality.Exogenousvariables:takenasdeterminedbyfactorsnotdiscussedinamodel.Endogenousvariables:determinedbyforcesdescribedinthemodel.Theoptimizationprinciple:Peopletrytochoosewhat’sbestforthem.Theequilibriumprinciple:Pricesadjustuntildemandandsupplyareequal.Thedemandcurve:Acurvethatrelatesthequantitydemandedtoprice.Thereservationprice:One’smaximumwillingnesstopayforsomething.Frompeople'sreservationpricestothedemandcurve.Similarly,thesupplycurve.Fig.Paretoefficiency:Aconcepttoevaluatedifferentwaysofallocatingresources.AParetoimprovementisachangetomakesomepeoplebetteroffwithouthurtinganybodyelse.AneconomicsituationisParetoefficientorParetooptimalifthereisalreadynowaytomakeanymoreParetoimprovement.ShortrunandlongrunEquilibriaintheshortrun(somefactorsareunchanged)andinthelongrun.Chapter2*Vectorvariablesandvectorfunctions.*Theinnerproductoftwovectors.*Withthepricevectorp=(p1,…,pn),thevalueofthecommoditybundlex=(x1,…,xn)ispTx=Σipixi.However,twogoodsareoftenenoughtodiscuss.Thebudgetconstraint:p1x1+p2x2≤m.Thebudgetlineandthebudgetset(themarketopportunityset).Theslopeofthebudgetline:dx2/dx1=–p1/p2.Howthebudgetlinemoveswhentheincomechanges,orwhenapricechanges.x2x1BudgetsetBudgetlineSlope=-p1/p2m/p2m/p1Budgetlineandbudgetsetx2x1BudgetlineSlope=-p1/p2m’/p2m/p2m/p1m’/p1IncreasingincomeSlope=-p’1/p2m/p2BudgetlineSlope=-p1/p2m/p’1m/p1IncreasingpriceAsubsidyistheoppositeofaquantitytax.Taxes,quantitytaxes,valuetaxes(advaloremtaxes),andlump-sumtaxes.Rationing.Theireffectsonthebudgetset.Chapter3*Prerequisite:AbinaryrelationRonXissaidtobeCompleteifxRyoryRxforanypairofxandyinX;ReflexiveifxRxforanyxinX;TransitiveifxRyandyRzimplyxRz.RationalagentsandstablepreferencesBundlexisstrictlypreferred(s.p.),orweaklypreferred(w.p.),orindifferent(ind.),toBundley.(Ifxisw.p.toyandyisw.p.tox,wesayxisindifferenttoy.)AssumptionsaboutPreferencesCompleteness:xisw.p.toyoryisw.p.toxforanypairofxandy.Reflexivity:xisw.p.toxforanybundlex.Transitivity:Ifxisw.p.toyandyisw.p.toz,thenxisw.p.toz.Theindifferencesets,theindifferencecurves.Theycannotcrosseachother.Fig.indifferencecurvesx2x1Perfectsubstitutesandperfectcomplements.Goods,bads,andneutrals.Satiation.FigsBluepencilsRedpencilsIndifferencecurvesPerfectsubstitutesPerfectcomplementsIndifferencecurvesLeftshoesRightshoesWell-behavedpreferencesaremonotonic(meaningmoreisbetter)andconvex(meaningaveragearepreferredtoextremes).Figsx2x1Betterbundles(x1,x2)MonotonicityBetterbundlesThemarginalrateofsubstitution(MRS)measurestheslopeoftheindifferencecurve.MRS=dx2/dx1,themarginalwillingnesstopay(howmuchtogiveupofx2toacquireonemoreofx1).Usuallynegative.FigConvexindifferencecurvesexhibitadiminishingmarginalrateofsubstitution.Fig.x2x1ConvexityAveragedbundle(y1,y2)(x1,x2)Chapter4(asawaytodescribepreferences)UtilitiesEssentialordinalutilities,versusconvenientcardinalutilityfunctions.Cardinalutilityfunctions:u(x)≥u(y)ifandonlyifbundlexisw.p.tobundley.Theindifferencecurvesaretheprojectionsofcontoursofu=u(x1,x2).Fig.Utilityfunctionsareindifferentuptoanystrictlyincreasingtransformation.Constructingautilityfunctioninthetwo-commoditycaseofwell-behavedpreferences:Drawadiagonallineandlabeleachindifferencecurvewithhowfaritisfromtheorigin.Examplesofutilityfunctionsu(x1,x2)=x1x2;u(x1,x2)=x12x22;u(x1,x2)=ax1+bx2(perfectsubstitutes);u(x1,x2)=min{ax1,bx2}(perfectcomplements).Quasilinearpreferences:Allindifferencecurvesarevertically(orhorizontally)shiftedcopiesofasingleone,forexampleu(x1,x2)=v(x1)+x2.Cobb-Douglaspreferences:u(x1,x2)=x1cx2d,oru(x1,x2)=x1ax21-a;andtheirlogequivalents:u(x1,x2)=clnx+dlnx2,oru(x1,x2)=alnx+(1–a)lnx2Cobb-DouglasMRSalonganindifferencecurve.DeriveMRS=–MU1/MU2bytakingtotaldifferentialalonganyindifferencecu