Chap-21The-Theory-of-Consumer-Choice(曼昆微观经济学-江西财大-

TheTheoryofConsumerChoiceChapter21Thetheoryofconsumerchoiceaddressesthefollowingquestions:Doalldemandcurvesslopedownward?Howdowagesaffectlaborsupply?Howdointerestratesaffecthouseholdsaving?Dothepoorprefertoreceivecashorin-kindtransfers?TheBudgetConstraintThebudgetconstraintdepictstheconsumption“bundles”thataconsumercanafford.Peopleconsumelessthantheydesirebecausetheirspendingisconstrained,orlimited,bytheirincome.TheBudgetConstraintItshowsthevariouscombinationsofgoodstheconsumercanaffordgivenhisorherincomeandthepricesofthetwogoods.TheConsumer’sOpportunitiesPintsofPepsiNumberofPizzasSpendingonPepsiSpendingonPizzaTotalSpending0100$0$1,000$1,00050901009001,000100802008001,000150703007001,000200604006001,000250505005001,000300406004001,000350307003001,000400208002001,000450109001001,00050001,00001,000Copyright©2001byHarcourt,Inc.AllrightsreservedTheConsumer’sBudgetConstraintAnypointonthebudgetconstraintlineindicatestheconsumer’scombinationortradeoffbetweentwogoods.Forexample,iftheconsumerbuysnopizzas,hecanafford500pintsofPepsi(pointB).IfhebuysnoPepsi,hecanafford100pizzas(pointA).TheConsumer’sBudgetConstraint...QuantityofPizzaQuantityofPepsi0Consumer’sbudgetconstraint500B100ATheConsumer’sBudgetConstraintAlternately,theconsumercanbuy50pizzasand250pintsofPepsi.TheConsumer’sBudgetConstraint...QuantityofPizzaQuantityofPepsi025050100500BCAConsumer’sbudgetconstraintTheConsumer’sBudgetConstraintTheslopeofthebudgetconstraintlineequalstherelativepriceofthetwogoods,thatis,thepriceofonegoodcomparedtothepriceoftheother.Itmeasurestherateatwhichtheconsumerwilltradeonegoodfortheother.Preferences:WhattheConsumerWantsAconsumer’spreferenceamongconsumptionbundlesmaybeillustratedwithindifferencecurves.RepresentingPreferenceswithIndifferenceCurvesAnindifferencecurveshowsbundlesofgoodsthatmaketheconsumerequallyhappy.TheConsumer’sPreferences...QuantityofPizzaQuantityofPepsi0CBAIndifferencecurve,I1DI2Theconsumerisindifferent,orequallyhappy,withthecombinationsshownatpointsA,B,andCbecausetheyareallonthesamecurve.TheConsumer’sPreferencesTheMarginalRateofSubstitutionTheslopeatanypointonanindifferencecurveisthemarginalrateofsubstitution.Itistherateatwhichaconsumeriswillingtosubstituteonegoodforanother.Itistheamountofonegoodthataconsumerrequiresascompensationtogiveuponeunitoftheothergood.TheConsumer’sPreferences...QuantityofPizzaQuantityofPepsi0CBADIndifferencecurve,I1I21MRSPropertiesofIndifferenceCurvesHigherindifferencecurvesarepreferredtolowerones.Indifferencecurvesaredownwardsloping.Indifferencecurvesdonotcross.Indifferencecurvesarebowedinward.Property1:Higherindifferencecurvesarepreferredtolowerones.Consumersusuallyprefermoreofsomethingtolessofit.Higherindifferencecurvesrepresentlargerquantitiesofgoodsthandolowerindifferencecurves.Property1:Higherindifferencecurvesarepreferredtolowerones.QuantityofPizzaQuantityofPepsi0CBADIndifferencecurve,I1I2Property2:Indifferencecurvesaredownwardsloping.Aconsumeriswillingtogiveuponegoodonlyifheorshegetsmoreoftheothergoodinordertoremainequallyhappy.Ifthequantityofonegoodisreduced,thequantityoftheothergoodmustincrease.Forthisreason,mostindifferencecurvesslopedownward.Property2:Indifferencecurvesaredownwardsloping.QuantityofPizzaQuantityofPepsi0Indifferencecurve,I1Property3:Indifferencecurvesdonotcross.PointsAandBshouldmaketheconsumerequallyhappy.PointsBandCshouldmaketheconsumerequallyhappy.ThisimpliesthatAandCwouldmaketheconsumerequallyhappy.ButChasmoreofbothgoodscomparedtoA.Property3:Indifferencecurvesdonotcross.QuantityofPizzaQuantityofPepsi0CABProperty4:Indifferencecurvesarebowedinward.Peoplearemorewillingtotradeawaygoodsthattheyhaveinabundanceandlesswillingtotradeawaygoodsofwhichtheyhavelittle.Thesedifferencesinaconsumer’smarginalsubstitutionratescausehisorherindifferencecurvetobowinward.1MRS=183IndifferencecurveAProperty4:Indifferencecurvesarebowedinward.QuantityofPizzaQuantityofPepsi014237B1MRS=646TwoExtremeExamplesofIndifferenceCurvesPerfectsubstitutesPerfectcomplementsPerfectSubstitutesTwogoodswithstraight-lineindifferencecurvesareperfectsubstitutes.Themarginalrateofsubstitutionisafixednumber.PerfectSubstitutesDimes0Nickels2142I1I263I3PerfectComplementsTwogoodswithright-angleindifferencecurvesareperfectcomplements.PerfectComplementsRightShoes0LeftShoes7575I1I2Optimization:WhattheConsumerChoosesConsumerswanttogetthecombinationofgoodsonthehighestpossibleindifferencecurve.However,theconsumermustalsoenduponorbelowhisbudgetconstraint.Optimization:WhattheConsumerChoosesCombiningtheindifferencecurveandthebudgetconstraintdeterminestheconsumer’soptimalchoice.Consumeroptimumoccursatthepointwherethehighestindifferencecurveandthebudgetconstraintaretangent.TheConsumer’sOptimalChoiceTheconsumerchoosesconsumptionofthetwogoodssothatthemarginalrateofsubstitutionequalstherelativeprice.TheConsumer’sOptimalChoiceAttheconsumer’soptimum,theconsumer’svaluationofthetwogoodsequalsthemarket’svaluation.TheConsumer’sOptimum...QuantityofPizzaQuantityofPepsi0I1I2I3BudgetconstraintABOptim