chap005UsingSupplyandDemand(中级微观经济学-江西

UsingSupplyandDemand,Chapter5,LaugherCurve,Q.Howmanyconservativeeconomistsdoesittaketoscrewinalightbulb?A.None.Ifthegovernmentwouldjustleaveitalone,itwouldscrewitselfin.,ThePowerofSupplyandDemand,Changesinsupplyanddemandwillchangeequilibriumpriceandquantity.,ThePowerofSupplyandDemand,Ashiftindemandthatmovesthedemandcurvetotherightcausesequilibriumpriceandquantitytorise.,ThePowerofSupplyandDemand,Ashiftinsupplythatmovesthesupplycurvetotheleftcausesequilibriumpricetoriseandequilibriumquantitytofall.,Price(percassette),A,S0,Quantityofcassettes(perweek),$2.50,2.25,0,9,8,10,AShiftinDemand,D0,A,AShiftinSupply,Price(percassette),Quantityofcassettes(perweek),$2.50,2.25,0,9,8,10,D0,S0,SixRealWorldExamplesofSupplyandDemand,Supplyanddemandcanshedlightonavarietyofreal-worldevents:Floridafreeze.Financialassetsandthebabyboomers.Tenpercentexcisetax.RiceinIndonesia.Farmlaborers.Christmastoys.,FloridaFreeze,Thecrop-damagingfreezeshiftedthesupplycurvetotheleft.Attheoriginalprice,quantitydemandedexceededquantitysupplied.Priceroseuntilthequantitydemandedequaledthequantitysupplied.,FloridaFreeze,Demand,S0,(c),FinancialAssetsandtheBabyBoomers,Demographicchangesamongbabyboomersmovedthedemandcurveforfinancialassetstotheright.Attheoriginalprice,quantitydemandedexceededquantitysupplied.Priceroseuntilthequantitydemandedequaledthequantitysupplied.,FinancialAssetsandtheBabyBoomers,S,(f),D0,FinancialAssetsandtheBabyBoomers,Thesamephenomenonoccurredinthesurgingdemandforhousingamongthisgroupduringthe1980s.,ExciseTaxes,Congressimposeda10percentsurtaxonluxuryboats.,ExciseTaxes,A10percentsurtaxonluxuryboatsleviedonsuppliersshiftsthesupplycurvetotheleft.,Afterthetaxisimposed,thequantityofboatsdemandeddrops.,ExciseTaxes,S0,D0,RiceinIndonesia,Drought,pestilence,andthefinancialcrisisshiftedthesupplycurvetotheleft.Thesteepdemandcurvemeansthatthequantitydemandeddoesnotchangemuchwithchangesinprice.,RiceinIndonesia,Respondingtohighprices,thegovernmentimportedriceanddistributedittothemarket,causingthesupplycurvetoshifttotheright.,RiceinIndonesia,(a),S0,Demand,FarmLaborers,ThecompressedharvestingseasonincreasedthedemandandincreasedINSpatrolsdecreasedsupply.Demandshiftedtotherightandsupplyshiftedtotheleft.,FarmLaborers,Attheoriginalprice,thequantityofworkersdemandedexceededthequantitysupplied.,FarmLaborers,Pricerisesuntilthequantitydemandedequaledthequantitysupplied.,FarmLaborers,Theeffectonthenumberoflaborershireddependedontherelativesizeofthesupplyshift.,FarmLaborers,(b),S0,D0,ChristmasToys,AChristmascrazeforFurbiesshiftsdemandtotheright.Ashortageensuedalongwithablackmarket.,ChristmasToys,Finallythesupplierproducedmore,shiftingthesupplycurvetotheright,causingthepricetodrop.,ChristmasToys,(d),S0,D0,AReview,GovernmentInterferences,Buyerslooktogovernmentforwaystoholdpricesdown.Sellerslooktogovernmentforwaystoholdpricesup.,PriceCeilings,Apriceceilingisagovernment-imposedlimitonhowhighapricecanbecharged.,RentControls,Rentcontrolisapriceceilingonrentssetbygovernment.AnexampleisrentcontrolinParisfollowingWorldWarIandWorldWarII.,RentControls,ThefollowingweretheconsequencesofrentcontrolinParis:,Ahugeshortageoflivingquarters.Newhousingconstructionstopped.Existinghousingwasallowedtodeteriorate.,RentControls,ThefollowingweretheconsequencesofrentcontrolinParis:,Formany,theonlywaytogetlivingquarterswastoofferahugebribetothelandlord.Manyfamilieshadtodoubleupwithotherfamilymembers.,RentControls,QS,QD,Supply,Demand,RentalPrice(permonth),Quantityofapartments,RentControls,AsimilarsituationoccurredinNewYorkCity.,AlloftheconsequencesofrentcontrolinParis(callednon-pricerationing)haveoccurredinNewYorkCity.Inaddition,preferencesbasedupongender,race,andothercharacteristicsoftenants,althoughillegal,arebroughtintoplay.,PriceFloors,Apricefloorisagovernment-imposedlimitonhowlowapricecanbecharged.,MinimumWage,Theminimumwageisanexampleofapricefloor.Aminimumwageissetbygovernmentspecifyingthelowestwageafirmcanlegallypayanemployee.,MinimumWage,Theminimumwagecreateswinnersandlosers:,Thosewhocanfindworkearnahigherwage.Othersbecomeunemployed.Productioncostsincrease.Consumerspayhigherprices.,MinimumWage,Economistsdisagreeabouttheeffectsoftheminimumwage.,Taxes,Tariffs,andQuotas,Anexcisetaxisataxthatisleviedonaspecificgood.Atariffisanexcisetaxonanimportedgood.Taxesandtariffsraisepricesandreducequantity.,TheEffectofanExciseTaxonPriceandQuantity,A10percentluxurytaxonexpensiveboatswasimposedin1990.,TheEffectofanExciseTaxonPriceandQuantity,Becausetheluxurytaxwasimposedontheboatbuilders,thesupplycurvemovedupbytheamountofthetax.,TheEffectofanExciseTaxonPriceandQuantity,Atapriceequaltotheoriginalpriceplusthetaxtherewasexcesssupply.,Thepriceforboatsrosebylessthanthetax,whilequantitysuppliedanddemandedfell.,D,S0,Quantityofluxuryboats,0,Priceofluxuryboats,TheEffectofanExciseTaxonPriceandQuantity,TheEffectofanExciseTaxonPriceandQuantity,Thetaxwasrepealedin1993becauseoftaxrevenueshortfalls.,QuantityRestrictions:Quotas,Aquotaisaquantitativerestrictionontheamountthatonenationcanexporttoanother.,QuantityRestrictions:Quotas,TheU.S.governmentrestrictedimportsofJapanesecars.,TheeffectwastoraisethepricesJapaneseautomobilesintheU.S.,5,Supply,Demand,Japaneseexportsofcars(inmillions),QuantityRestrictions:Quotas,TheRelationshipBetweenaQuotaandaTariff,Tariffsandquotascanbothbeusedtoreducequantityandraiseprices.,TheRelationshipBetweenaQuotaandaTariff,Thereisadifferencebetweenimposingatariffandimposingaquota.,Inthecaseofaquota,theprofitsfromahigherpricegoestothemanufacturer.Inthecaseofthetariff,thetaxgoestothegovernment.,TheRelationshipBetweenaQuotaandaTariff,Asaconsequence,oncequotasareinstituted,Japanesefirmscompetedintenselytogetthem.,TheRelationshipBetweenaQuotaandaTariff,Japaneseexportsofcars,Demand,PriceofJapanesecars,S0,Tariffrevenue,TheLimitationsOfSupplyAndDemandAnalysis,Itisnotenoughtobeabletoexplainwhathappenswhensupplyordemandcurvesshift.Itisnecessarytounderstandtheassumptionsunderlyingtheanalysis.,TheLimitationsOfSupplyAndDemandAnalysis,Otherthingsdontremainconstant.,Sometimessupplyanddemandareinterconnected.Supply/demandanalysisisthefirststeptoanalysis,notthecompleteanalysis.,TheLimitationsOfSupplyAndDemandAnalysis,Decidingwhethertheeffectsaresignificanttoconsiderrequiresaknowledgeofthestructureoftheeconomybecauseallactionshaverippleorfeedbackeffects.,TheLimitationsOfSupplyAndDemandAnalysis,Theother-things-constantassumptionislikelynottoholdtruewhenonethegoodsrepresentalargepercentageoftheentireeconomy.,TheFallacyofComposition,Thefallacyofcompositionisthefalseassumptionthatwhatistrueforapartwillalsobetrueforthewhole.,TheFallacyofComposition,Thousandsofsmalleffectstakentogetheradduptoalargeeffect.,TheFallacyofComposition,Whenanalyzingtheaggregate,smalleffectsthatcanbeputasideinmicro,canaddup,andhencecannotbeforgotten.,TheFallacyofComposition,Smalleffectscomprisemicroeconomicswhilelargeeffectscomprisemacroeconomics.,TheRolesofGovernment,Provideastableinstitutionalframework.Promoteeffectiveandworkablecompetition.Correctforexternalities.Ensureeconomicstabilityandgrowth.Provideforpublicgoods.Adjustforundesiredmarketresults.,ProvideaStableSetofInstitutionsandRules,Onlythegovernmentcancreateastableenvironmentandenforcecontractsthroughitslegalsystem.,ProvideaStableSetofInstitutionsandRules,Whengovernmentsdonotprovideastableenvironment,asisnowhappeninginRussia,economicgrowthisdifficult-usuallysucheconomiesarestagnant.,PromoteEffectiveandWorkableCompetition,Governmentpromotescompetitionandprotectagainstmonopolies.Monopolypoweristheabilityofindividualsorfirmscurrentlyinbusinesstopreventotherindividualsorfirmsfromenteringthesamekindofbusiness,PromoteEffectiveandWorkableCompetition,Monopolypowergivesexistingfirmsorindividualsthepowertoraiseprices.,PromoteEffectiveandWorkableCompetition,Manyplayersinthemarketinsistonopencompetitionexceptwhenitcomestothemselves:,Farmerslikecompetitionbutstillwantpricesupports.Lawyersandarchitectslikecompetitionbutstillwantlicensingtopreventothersfromenteringthemarket.,CorrectforExternalities,Unlesstheyarerequiredtodoso,partiestoanyexchangeareunlikelytotakeintoaccountanyexternality.,CorrectforExternalities,Anexternalityistheeffectthatanactionmayhaveonathirdpartythatthepersonwhoundertookthatactiondidnottakeintoaccount.,CorrectforExternalities,Theexternalitymaybepositiveinwhichcasesocietybenefitsevenmorethanthetwopartiesanexampleiseducation.,CorrectforExternalities,Theexternalitymaybenegativeinwhichcasesocietyasawholebenefitslessthanthetwopartiesanexampleispollution.,CorrectforExternalities,Whenthereareexternalities,governmenthasthepotentialroletochangetherulessothatthepartiesmusttakeintoaccounttheeffectoftheiractionsonothers.,EnsureEconomicStabilityandGrowth,MostAmericansagreethatgovernmentshould:Preventlargefluctuationsineconomicactivity.Maintainarelativelyconstantpricelevel.Provideaneconomicenvironmentconducivetoeconomicgrowth.,EnsureEconomicStabilityandGrowth,Mosteconomistssupportthesegoalssincetheyinvolvemacroeconomicexternalities.,Macroeconomicexternalitiesareexternalitiesthataffectthelevelsofunemployment,inflation,andgrowthintheeconomyasawhole.,ProvideforPublicGoods,Publicgoodsarethosewhoseconsumptionbyoneindividualdoesnotpreventtheirconsumptionbyotherindividualsanexampleisapublicpark.,ProvideforPublicGoods,Incontrast,aprivategoodisonethat,whenconsumedbyoneindividual,cannotbeconsumedbyotherindividualsanexampleisanapple.,ProvideforPublicGoods,Afreeriderisapersonwhoparticipatesinsomethingwithouthavingtopayforit.,ProvideforPublicGoods,Sincemosteveryonewouldenjoyhavingpublicparkswithouthavingtopayforthem,governmentrequiresthatthepublicbetaxedtopayforpublicparks,therebyeliminatingfreeriders.,AdjustforUndesiredMarketResults,Inanattempttomakethemarketfairer,thegovernment,throughtaxesandexpenditures,redistributesincomeamonghouseholds.Theresultiscontroversy.,AdjustforUndesiredMarketResults,Forexample,intryingtobefair,whichtypeoftaxshouldthegovernmentuse?,AdjustforUndesiredMarketResults,Aprogressivetax,suchastheU.S.incometaxisonewhoseratesincreaseasapersonsincomeincreases.,AdjustforUndesiredMarketResults,Aregressivetaxsuchasasalestaxisonewhoseeffectdecreaseasincomerises.,AdjustforUndesiredMarketResults,Aproportionaltax,suchastheSocialSecuritytax,isonewhoseratesareconstantatallincomelevels,regardlessofthetaxpayerstotalannualincome.,AdjustforUndesiredMarketResults,Anothercontroversialroleforgovernmentinvolvesdecidingwhatis