微观经济学1_2.doc

中级微观经济学参考书：Hal R. Varian. Intermediate Microeconomics, A Modern Approach. W. W. Norton & Company, Inc.1 BUDGET CONSTRAINTConsumer theory - how consumers buy their goods? Economists assume: consumers choose the best bundle of goods they can afford. Two aspects:-Consumers choose the most preferred goods.-They are limited by economic condition.The Budget Constraint Consumption bundles: （消费束，商品组合）: a list of numbers of goods and services. X=(x1, x2, , x n,)In the case of two goods: good 1 and good 2: X = (x1, x2)Prices of goods: (p1, p2), The amount of money the consumer has to spend: m. The consumers affordable consumption bundles, (x1, x2) satisfyingp1x1 + p2x2 m.-The budget set of the consumer. good 2 m/p2 O m/p1 good 1The case of n goodsBudget constraint: p1x1 + p2x2+ pnxn m.Two Goods Are Often EnoughComposite good -take x2 as everything else, the dollars spent on other goods.For example, x1: consumption of milk in quarts per month. Thus the budget constraint will take the form p1x1 + x2 m. Properties of the Budget SetBudget line（预算线）: p1x1 + p2x2 = m.Vertical intercept: m/p2Horizontal intercept: m/p1.Slope: p1/p2For the budget line:p1x1 + p2x2 = m.After a change in bundle (x1, x2):p1(x1+x1) + p2(x2+x2) = m. good 2 x2 x2x1 O x1 good 1Subtracting the first equation from the second gives p1x1 + p2x2 = 0.This gives Economic interpretation of slope:If the consumer changes his consumption of good 1 by x1, good 2 by x2, and keeps the money spent unchanged.Opportunity cost of consuming good 1- in order to consume more of good 1 you have to give up some consumption of good 2. Budget Line ChangesHow the Budget Line Changes when prices and incomes change?Change in income results in a parallel shift of the budget line.Intercepts m/p2 and m/p1 will change. Slope p1/p2 keeps unchanged. good 2 m/p2 O m/p1 good 1Changes in pricesIncreasing p1 will not change the vertical intercept, but p1/p2 will become larger. good 2 m/p2 O m/p1 good 1What happens to the budget line when we change the prices of good 1 and good 2 at the same time? Proportionally: (tp1)x1 + (tp2)x2 = m.What happens to the budget line when we change the prices of good 1 and good 2 and the consumers income at the same time? Proportionally: (tp1)x1 + (tp2)x2 = tm. good 2 m/p2 O m/p1 good 1Some observations:If one price declines and all others stay the same, the consumer must be at least as well-off. If the consumers income increases and all prices remain the same, the consumer must be at least as well-off as at the lower incomeA perfectly balanced inflation cannot change anybodys optimal choice.2 PREFERENCESConsumer Preferences（消费者偏好）Consumer ranks consumption bundles by his satisfaction from use of goods, irrelevant to the prices.The case of two goodsGiven any two consumption bundles, X=(x1, x2) and Y=(y1, y2), the consumer can rank them in one of three possible ways:(x1, x2) is strictly better than (y1, y2);(y1, y2) is strictly better than (x1, x2); (x1, x2) and (y1, y2) are indifferent.Two basic relations: strictly preferred（严格偏好于）, (x1, x2) (y1, y2): the consumer strictly prefers (x1, x2) to (y1, y2). : indifferent （无差异）(x1, x2) (y1, y2). the consumer is indifferent between (x1, x2) and (y1, y2). A composite relation: weakly preferred （弱偏好于）(x1, x2) (y1, y2): the consumer prefers (x1, x2) to (y1, y2) or is indifferent between (x1, x2) and (y1, y2).Assumptions about PreferencesAxioms about consumer preference (weakly preference):Complete（完备性）. Given any X-bundle and any Y-bundle, consumer can say that (x1, x2)(y1, y2), or (y1, y2)(x1, x2).Reflexive（反身性）. Consumer should say that any bundle is at least as good as itself: (x1, x2)(x1, x2).Transitive 传递性）. If a consumer feels that (x1, x2)(y1, y2) and (y1, y2)(z1, z2) then he feels that (x1, x2)(z1, z2). Indifference CurvesWeakly preferred set: all of the consumption bundles that are weakly preferred to (x1, x2). Good 2 x2 O x1 Good 1Indifference curves（无差异曲线）: The boundary of weakly preferred set, the bundles for which the consumer is just indifferent to (x1, x2).Further assumptions Well-behaved preferences（良好的偏好）:Monotonicity （单调性）- more is better. If that x1 y1, x2 y2 and that x1 y1 , x2 y2 at least one hold, then (x1, x2) (y1, y2) -indifference curves have negative slope. Good 2 O Good 1Convexity （凸性）- averages are preferred to extremes. If (x1, x2) and (y1, y2) are indifferent, then the bundle(x1+y1, x2+y2) is strictly preferred to (x1, x2) and (y1, y2).-indifference curves are convex. Good 2 O Good 1Examples of preferencesPerfect Substitutes（完全替代）The consumer is willing to substitute one good for the other at a constant rate. Good 2O Good 1Perfect Complements（完全互补）Goods that are always consumed together in fixed proportions. Good 2O Good 1Discrete Goods（离散商品）x1 : a discrete good that is only available in integer amounts. Suppose that x2 is money to be spent on other goods. Good 2O Good 1The Marginal Rate of SubstitutionMarginal rate of substitution (MRS，边际替代率): slope of an indifference curve. - measures the rate at which the consumer is just willing to substitute one good for the other. MRS = Note: MRS is a negative number. Good 2 Dx2 O Dx1 Good 1The other form of MRSMRS = Good 2 x2 O x1 Good 1Behavior of the Marginal Rate of SubstitutionDescribe the indifference curves by the MRS. Perfect substitutes: the marginal rate of substi