一级培训项目济学

何职称：金程教育资何职称：金程教育资深培训师、通过CFA三级、通过FRM联系方微博：何旋100%ContributionBreedsTopicWeightingsinCFALevel100%ContributionBreedsEthics&ProfessionalQuantitativeTopicWeightingsinCFALevel100%ContributionBreedsEthics&ProfessionalQuantitativeEconomicFinancialStatementCorporate8Portfolio5Derivative5Alternative3FrameworkofSS4FrameworkofSS4MicroeconomicR13demandandsupply: R14demandandsupply:consumerdemandR15demandandsupply:theR16thefirmandthemarketSS5MacroeconomicR17aggregateoutput,price,andeconomicR18understandbusinessR19monetaryandfiscalSS6EconomicsinaGlobalR20internationaltradeandcapitalR21currencyexchange100%ContributionBreedsR13DemandandSupply:TypesR13DemandandSupply:TypesofDemand&SupplyConsumer&ProducerMarket100%ContributionBreedsTypesofGoodsmarkets:forTypesofGoodsmarkets:foroutputofproduction(finishedgoods&buyer:householdsseller:Intermediategoods:usedintheproductionoffinaleg:computerFactormarkets:forfactorsofbuyer:seller:eg:land,labor,physicalcapital,Capitalmarkets：usedbyfirmstoselldebtorequitytoraiselong-termcapitaltofinancetheproduction100%ContributionBreedsTheDemandthequantityofdemandeddependsonincome,thepricesofothergoods,TheDemandthequantityofdemandeddependsonincome,thepricesofothergoods,aswellasotherfactorsQdx=f(pX,I,pQDgas=9-1.5Pgas+0.02I+0.11PBT-0.008Pauto(BT:BusTravelAssumingI=40,PBT=25,QDgas=12.34-1.5Pgas(demandInverttheP=8.23-0.667QDgas(inversedemandThegraphoftheinversedemandfunctioniscalledthedemandTheslopeofdemandcurveis-Lawofdemanddecreasedastheprice100%ContributionBreedsDemandDemandfunction:Qgas=12.34-DemandDemandfunction:Qgas=12.34-InverseDemandfunction:Pgas=8.23-100%ContributionBreedsTheSupplyThequantitysupplydependsonthesellingprice,thecostsofproductionwhichdependontechnology,thecostoflabor,andthecostofotherinputsintotheproductionprocess.QTheSupplyThequantitysupplydependsonthesellingprice,thecostsofproductionwhichdependontechnology,thecostoflabor,andthecostofotherinputsintotheproductionprocess.Qsx=f(PX,-300+1.5Ptables-8W-AssumingW=12,P=-426+1.5Ptables(SupplyInvertthePThegraphoftheinversesupplyfunctioniscalledthesupplyTheslopeofthesupplycurveisLawofsupplyincreasedastheprice100%ContributionBreedsSupply100%ContributionBreedsSupplySupply100%ContributionBreedsSupplyfunction:QInversesupplyShiftsinandMovementsalongDemandand MovementsalongdemandandsupplyShiftsinandMovementsalongDemandand Movementsalongdemandandsupplycurves.沿着需求（供给）AchangeinthemarketpricethatsimplyincreasesordecreasesquantitysuppliedordemandedisrepresentedbyamovementtheShiftsindemandandsupplycurves.需求（供给）Achangeinoneoftheindependentvariablesotherthanpriceresultinashiftofthecurve100%ContributionBreedsMovementsalongDemandandSupplyQQ01ChangeinQuantityMovementsalongDemandandSupplyQQ01ChangeinQuantityChangeinQuantity100%ContributionBreedsShiftsinDemandandSupplyAnincreaseinAdecreaseShiftsinDemandandSupplyAnincreaseinAdecreaseinOriginalAinAnincreaseinOriginal100%ContributionBreedsAggregatingDemandandSupplyAggregatingdemandandsupplyAddthefirmsthatAggregatingDemandandSupplyAggregatingdemandandsupplyAddthefirmsthatcomprisemarketsupplytogethertogetthemarketsupplyAddthemanyindividualdemandcurvestogetthemarketdemandIf10,000consumershavethedemandfunctionforgasoline:QDgas=9-3Pgas+0.021+0.11PBT-0.008PautoIfthepriceofbustravelis$20,incomeis$50,000,andtheaveragepriceisDeterminetheslopeofthemarketdemandMarketdemandis:QDgas=90,000-30,000Pgas+2001+1,100PBTQD=90,000-30,000Pgas+200*50+1,100*20-QD=119,600-Invertingthisfunction,Pgas=3.987-0.00003333Theslopeofthedemandcurveis-0.00003333,orifwemeasurequantityofgasinthousandsofgallons,weget-0.0333.100%ContributionBreedsMarketEquilibriumpriceandtheequilibriumWhenhaveamarketsupplyandmarketdemandcurveforagood,wecansolvefortheMarketEquilibriumpriceandtheequilibriumWhenhaveamarketsupplyandmarketdemandcurveforagood,wecansolveforthepriceatwhichthequantitysuppliedequalsthequantitydemanded.Wedefinethisastheequilibriumpriceandtheequilibriumquantity.PSEDQOE:marketequilibrium.Attheprice,thequantityofsupply=thequantityof100%ContributionBreedsMovementtowardIfthepriceisaboveitsequilibriumlevel,thequantitywillinglysuppliedexceedsthequantityconsumersarewillingtopurchase,andwehaveexcesssupply.Supplierswillingtosellatlowerpricewillofferthosepricestoconsumers,drivingthemarketpricedowntowardstheequilibriumlevel.IfthemarketpriceisbelowitsMovementtowardIfthepriceisaboveitsequilibriumlevel,thequantitywillinglysuppliedexceedsthequantityconsumersarewillingtopurchase,andwehaveexcesssupply.Supplierswillingtosellatlowerpricewillofferthosepricestoconsumers,drivingthemarketpricedowntowardstheequilibriumlevel.Ifthemarketpriceisbelowitsequilibriumlevel,thequantitydemandedatthatexceedsthequantitysupplied,andwehaveexcessdemand.Consumerswillofferhigherpricestocompetefortheavailablesupply,drivingthemarketpriceuptowardsitsequilibriumSupplyExcesssupplydrivespriceSuppliersreduceproductioninresponsetodecliningDemandatatat100%ContributionBreedsproductioninSupplyresponserising DemandMarginalBenefitandMarginalMarginalbenefitMarginalBenefitandMarginalMarginalbenefitisthebenefitderivedfromconsumingadditionalunitofagoodorMB:toMR:toMBcurve==DemandMarginalcost,thecostofproducingonemoreunitofagoodMCcurve==Supply100%ContributionBreedsMarginalBenefitandMarginalEfficiencyandWhenMarginalBenefitandMarginalEfficiencyandWhenMB>MCorMB<MC,thequantityofgoodisWhenMB=MC,thequantityofgoodisefficiencyandthesumofconsumersurplusandproducerssurplusismaximized.PQ100%ContributionBreedsStableandUnstableAnequilibriumistermedstablewhenthereareforcesthatmovepriceStableandUnstableAnequilibriumistermedstablewhenthereareforcesthatmovepricequantitybacktowardsequilibriumvalueswhentheydeviatefromthoseaslongassupplycurvecutsthroughthedemandcurvefromabove,equilibriumwillbe供给曲线从上向下穿过（从上压住）需求曲Ifthesupplycurveislesssteeplyslopedthanthedemandcurve,andabove(below)equilibriumwilltendtogetfurtherfromequilibrium.Werefersuchanequilibriumas供给曲线从下向上穿过需求曲100%ContributionBreedsStableandUnstableSDSExcessExcessStable ExcessdemandedExcessDDSSExcessUnstableUnstableStableandUnstableSDSExcessExcessStable ExcessdemandedExcessDDSSExcessUnstableUnstableStableD100%ContributionBreedsTypesofAuctionisanalternativetomarketsTypesofAuctionisanalternativetomarketsfordetermininganequilibriumTypesofAuction:CommonvalueauctionVSPrivatevaluecommonvaluevalueoftheitemtobeauctionedwillbethesametoanybiddermustestimatewhatthatvaluebiddermostoverestimatesthewinner'sprivatevalueauction:Thevaluethateachbidderplacesonanitemisthevalueithastohim,andweassumethatnobidderwillbidmorethanthat.(e.g.,art,collectibles)100%ContributionBreedsTypesofcommontypeofascendingpriceauction(EnglishbidderscanbidanamountgreaterthantheprevioushighbidderthatfirstTypesofcommontypeofascendingpriceauction(Englishbidderscanbidanamountgreaterthantheprevioushighbidderthatfirstoffersthehighestbidoftheauctionwinstheitemandpaystheamountbid.Winner’scurse:bidmorethantheultimatevalueoftheassetforcommonsealedbidbidsareelicitedfrompotentialthereisnoabilitytoobservebidsbyotherbuyersuntiltheauctionhasreservationprice:referstothehighestpricethatabidderiswillingtothefirstsealedbidBidsareopenedsimultaneouslyandtheitemissoldtothehighestbidderfortheactualbidprice.Typically,someoverlyoptimisticbidderswillvaluetheassethigherthanitsultimaterealizablevalue,andtheymightsubmitbidsabovethattruevalue.Becausethehighestbidderwinstheauctionandmustpayhisfullbidprice,hemayfindthathehasfallenpreytothewinner’scurseofhavingbidmorethantheultimatevalueoftheasset.Inrecognitionofthepossibilityofbeingoverlyoptimistic,biddersmightbidveryconservativelybelowtheirexpectationofthetruevalue.secondpricesealedbidauction(VickreythebiddersubmittingthehighestbidwinstheitembutpaystheamountbidbythesecondhighestbidderInducesbuyerstorevealtheirtruevaluationofthe100%ContributionBreedsTypesofdescendingpriceauction(DutchbeginswithTypesofdescendingpriceauction(Dutchbeginswithapricegreaterthanwhatanybidderwillpay,andthisofferisreduceduntilabidderagreestopayModifiedDutchauction:establishingasinglepriceforallpurchasers.ItcommonlyusedinsecuritiesSinglepriceauctionisusedinsellingU.S.Treasurysecurities.Butbiddersmayalsosubmitanoncompetitivebid.SuchabidindicatesthatthosebidderswillaccepttheamountofTreasuriesindicatedatthepricedeterminedbytheauction,ratherthanspecifyingamaximumpriceintheir100%ContributionBreedsExample:SinglePriceAuctioningTreasuryBillswithaSinglePriceTheU.S.Treasuryofferstosell$115billionof52-weekT-billsandrequestscompetitiveandnon-competitivebids.Non-competitivebidstotal$10billion,andcompetitivebiddersindescendingorderofofferpriceareasgivenintheExample:SinglePriceAuctioningTreasuryBillswithaSinglePriceTheU.S.Treasuryofferstosell$115billionof52-weekT-billsandrequestscompetitiveandnon-competitivebids.Non-competitivebidstotal$10billion,andcompetitivebiddersindescendingorderofofferpriceareasgiveninthetableDeterminethewinningpriceifasinglepriceDutchauctionisusedtoselltheseT-Forthosebiddersatthewinningprice,whatpercentageoftheirorderwouldbe100%ContributionBreedsBid(%)per($billions)($billions)Bids($Bids($billions)5Example:SinglePriceSolutionto1:Enterthenon-competitivequantityof$10billionintothetable.ThenfindcumulativecompetitivebidsandthetotalcumulativebidsExample:SinglePriceSolutionto1:Enterthenon-competitivequantityof$10billionintothetable.ThenfindcumulativecompetitivebidsandthetotalcumulativebidsintherespectiveNotethatatabidpriceof99.8400therewouldbeexcessdemandof$12billion(i.e.,thedifferencebetween$127billionbidand$115billionoffered),butatthehigherpriceof99.8405therewouldbeexcesssupply.Sothewinningbidwouldbeatapriceof99.8400.Solutionto2:Atapriceof99.8400,therewouldbe$15billionmoredemandedthanat($127billionminus$112billion),andat99.8405therewouldbeexcesssupplyequalto$3billion.Sothebiddersatthewinningbidwouldhaveonly3/15,or20percent,oftheirordersfilled.100%ContributionBreedsBidPrice($billions)($billions)($billions)5ConsumerSurplus,ProducerSurplus,andTotalThedifferencebetweenthetotalvaluetoconsumersoftheunitsofagoodthattheybuyConsumerSurplus,ProducerSurplus,andTotalThedifferencebetweenthetotalvaluetoconsumersoftheunitsofagoodthattheybuyandthetotalamounttheymustpayforthoseunitsiscalledconsumerProducersurplusistheexcessofthemarketpriceabovetheopportunitycostofTotalsurplus=consumersurplus+producerPAEBOQ100%ContributionBreedsRelationshipbetweenConsumerSurplusandProducerRelationshipbetweenConsumerSurplusandProducerWhentheefficientquantity(MB=MC)isproduced,thesumofconsumersurplusandproducessurplusismaximized.Buyersandsellersactingintheirself-interestenduppromotingthesocialinterest.Ifthesupplycurveissteeperthanthedemandcurve,moreofthesurplusisbeingcapturedbyproducers.Ifthedemandcurveissteeper,consumerscapturemoreofthesurplus.Totalsurplusisameasureofsociety’sgainfromthevoluntaryofgoodsand100%ContributionBreedsCalculatingConsumerandProducerCalculatingConsumerandProducerCalculatingConsumerandProducerSurpluswhendemandandsupplyarelinear(assume:demandcurveandsupplycurvehavethesamesteepness.)DemandfunctionQ=48-P=8theconsumersurplus=1/2(8×24)=96SupplyfunctionQ=-P=8Theproducersurplus=1/2(4×24)=100%ContributionBreedsDeadweightDeadweightThereductioninconsumerandproducersurplusdueunderproductionoroverproductioniscalledaDeadweightDeadweightThereductioninconsumerandproducersurplusdueunderproductionoroverproductioniscalledadeadweightSupplyDeadweightlossDemandQuantity100%ContributionBreedsSupplyDeadweightlossDemandObstaclestoObstaclestoPriceObstaclestoObstaclestoPricecontrols:priceceiling(underproduction,e.g.rentcontrol)andpricefloor(overproduction,e.g.minimumwage)Tax:buyerspayahigherprice,sellersreceivealowerpriceSubsidies:overproductionQuotas:underproductionMonopoly:underproductionExternalcosts:overproductionExternalbenefits:underproductionPublicgoods:underproductionCommonresources:100%ContributionBreedsPriceApriceceilingisanupperlimitonthepricewhichasellercancharge.Iftheceilingisabovetheequilibriumprice,itwillhavenoeffect.AfterimpositionofapricePriceApriceceilingisanupperlimitonthepricewhichasellercancharge.Iftheceilingisabovetheequilibriumprice,itwillhavenoeffect.AfterimpositionofapriceflooratConsumersurplus:Producersurplus:Deadweightloss:Inthelongrun,pricefloorsleadtoPConsumersmayhavetowaitinlonglinestomakepurchases.Theypayaprice(anopportunitycost)intermsofthetimetheyspendinline.Suppliersmayengageindiscrimination,suchassellingtofriendsandrelativesfirst.Suppliers“officially”sellattheceilingpricebuttakebribestodoso.Suppliersmayalsoreducethequalityofthegoodsproducedtoalevelcommensuratewiththeceilingprice.Note:Apriceceilingtransferssurplusequaltoareacfromsellerstobuyers,butitdestroyssurplusequaltoareab+d,calledadeadweightloss.100%ContributionBreedsSabcdeDPricePricefloorisaminimumpricethatabuyercanofferagood,service,orresource.Ifthepricefloorisbelowtheequilibriumprice,itPricePricefloorisaminimumpricethatabuyercanofferagood,service,orresource.Ifthepricefloorisbelowtheequilibriumprice,itwillhavenoeffectonequilibriumpriceandquantity.AfterimpositionofapriceflooratConsumersurplus:Producersurplus:Deadweightloss:Inthelongrun,pricefloorsleadtoSupplierswilldivertresourcestotheproductionofthegoodwiththeanticipationofsellingthegoodatthefloorprice,butthenwillnotbeabletosellalltheyproduce.Consumerswillbuylessofaproductifthefloorisabovetheequilibriumpriceandsubstituteother,lessexpensiveconsumptiongoodsforthegoodsubjecttothepricePxSaPfcbedDNote:Apricefloortransferssurplusequaltoareabfrombuyerstosellers,butitdestroyssurplusequaltoareac+d,calledadeadweightloss100%ContributionBreedsMinimumTheminimumwageMinimumTheminimumwageintheUnitedStatesisanexampleofapriceminimumwagerate(livingwage)thatpreventsemployersfromhiringworkersatawagelessthanthelegalminimum. minimumwage>equilibriumwagewillbeanexcesssupplyofTheresultisincreasedunemploymentbecauseevenwhenthereareworkerswillingtoworkatawagelowerthantheminimum,firmscannotlegallyhirethem.firmsmaydecreasethequalityorquantityofthebenefitstheypreviouslyofferedtoworkers,suchaspleasant,safeworkingconditionsandon-the-jobtraining100%ContributionBreedsImpactofTheincidenceofataxisallocationofthistaxbetweenbuyersTaxonTaxonDSImpactofTheincidenceofataxisallocationofthistaxbetweenbuyersTaxonTaxonDSDSSPP ppEppSS100%ContributionBreedsTaxrevenuefromTaxrevenuefromTaxrevenuefromTaxrevenuefromImpactofActualandStatutoryIncidenceImpactofActualandStatutoryIncidenceofaStatutoryincidencereferstowhoislegallyresponsibleforpayingtheTheactualincidenceofataxreferstowhoactuallybearsthecostofthetaxthroughanincreaseinthepricepaid(buyers)ordecreaseinthepricereceived(sellers)TaxonStatutoryincidence:Actualincidence:sellersandbuyersTaxonbuyers:Statutoryincidence:Actualincidence:buyersand100%ContributionBreedsSubsidiesarepaymentsmadebygovernmentstoproducers,oftenS(dollarsperS-DeadweightlossSubsidiesarepaymentsmadebygovernmentstoproducers,oftenS(dollarsperS-DeadweightlossD（millionsoftonsperAfterimpositionofsubsidies,supplywillincrease,whichleadtoincreaseinquantity,Buyerswillpayalowerprice.Sellerswillreceiveahigher100%ContributionBreedsAsaresultofadeclineincucumberproductionbysmall-scalegrowers,theU.S.governmentAsaresultofadeclineincucumberproductionbysmall-scalegrowers,theU.S.governmenthasdecidedtoprovideassistancetocucumbergrowersbypayingthem$0.05perpoundproduced.WhichofthefollowingisthemostlikelyresultofthisThemarginalbenefitofcucumberswillexceedthemarginalcost,causingadeadweightloss.Themarginalcostofcucumberswillexceedthemarginalbenefit,causingadeadweightloss.Themarginalcostofcucumberswillexceedthebenefit,andashortageofcucumberswill100%ContributionBreedsProductionquotasareusedtoregulatemarketsbyimposinganupperlimitonthequantityofagoodthatmaybeproducedoveraspecifiedtimeperiod.Quotasareoftenusedbygovernmentstoregulateagriculturalmarkets.Afterimpositionofquotas,thequantityProductionquotasareusedtoregulatemarketsbyimposinganupperlimitonthequantityofagoodthatmaybeproducedoveraspecifiedtimeperiod.Quotasareoftenusedbygovernmentstoregulateagriculturalmarkets.Afterimpositionofquotas,thequantitywilldecrease,underproduction.BuyerswillpayahigherAtthequotaamount,marginalbenefit(price)exceedsmarginalcost.Thisexplainswhyproducersoftenseektheimpositionofquotas.(dollarsperinproducerDeadweightlossLossofproducerQuantityproducerdecreasestoQuotaamount=60 100%ContributionBreedsMBMCPriceElasticityCrossElasticityofOtherelasticityofIncomeElasticityof100%ContributionBreedsPriceElasticityCrossElasticityofOtherelasticityofIncomeElasticityof100%ContributionBreedsPriceElasticityofPriceelasticityisameasureoftheresponsivenessofthequantitydemandedtoachangeinprice.PriceElasticityofPriceelasticityisameasureoftheresponsivenessofthequantitydemandedtoachangeinprice.TheformulausedtocalculatethepriceelasticityofdemandispercentchangeinquantitydemandQ/priceelasticityofdemandP/percentchangeinpercentchangechangeinvalueendingvalue-beginningvalue(endingvaluebeginning2100%ContributionBreedsPriceElasticityofIfasmallpercentagepricechangeresultsinalargepercentagechangeinquantitydemanded,thedemandforthatgoodissaidtobehighlyPriceElasticityofIfasmallpercentagepricechangeresultsinalargepercentagechangeinquantitydemanded,thedemandforthatgoodissaidtobehighlyelastic.Theabsolutevalueofpriceelasticityisgreaterthanone.Ifalargepercentagepricechangeresultsinasmallpercentagechangeinquantitydemanded,demandisrelativelyinelastic.Theabsolutevalueofpriceelasticityislessthanone.Aperfectlyelasticdemandcurveishorizontal,anditselasticityisinfinite.Ifthepriceincreases,quantitydemandedgoestozero.Aperfectlyinelasticdemandcurveisvertical,andelasticityiszero.IfthepricetherewillbenochangeinthequantityPerfectlyPerfectlyPerfectlyInelastic/100%ContributionBreedsPriceElasticityofDemandisDifferentAlongalinearDemandCurveTherelationbetweenpriceelasticityofdemandandtotalrevenue.Totalrevenueismaximizedatthepriceandquantitywheredemandisunitelastic(priceelasticity=－1)andsodecreaseswithbothpriceincreasesorpricedecreasesfromthatWhenpriceisPriceElasticityofDemandisDifferentAlongalinearDemandCurveTherelationbetweenpriceelasticityofdemandandtotalrevenue.Totalrevenueismaximizedatthepriceandquantitywheredemandisunitelastic(priceelasticity=－1)andsodecreaseswithbothpriceincreasesorpricedecreasesfromthatWhenpriceisintheelastic(inelastic)regionofthedemandcurve,apriceincreasewilldecrease(increase)totalWhenEp>1,ifpriceincreases,thequantitywilldecrease,andthechangeinquantityisgreaterthanthatinprice.Asaresult,thetotalrevenuewilldecrease.TR=P*Q,△R/R=△P/P+△P,△Q,but∣△Q∣>∣△PSo△R/R=△P/P+△Q/Q<TR87654highelasticity=-unitaryelasticity=- unitary321elasticity=-2050 100%ContributionBreedsElasticityofSupplyandDemandandTax(a)InelasticSupply(b)InelasticDemandtaxfromtaxfromSPPElasticityofSupplyandDemandandTax(a)InelasticSupply(b)InelasticDemandtaxfromtaxfromSPPEPSSPEDtaxfromtaxfromDDDQTaxQIfthesupplycurveislesselastic,sellerswillbearahighertaxburden.(FigureIfthedemandcurveislesselastic,buyerswillbearahighertaxburden.100%ContributionBreedsThegovernmentofWallvaniaisevaluatingtheimpactofanewtaxonautomobilesthatwillbeThegovernmentofWallvaniaisevaluatingtheimpactofanewtaxonautomobilesthatwillbeleviedonmanufacturers.ResearchontheautomarketinWallvaniashowsthatsupplyismoreelasticthandemand.WhichofthefollowingstatementsismostAutomanufacturerswillbeartheentiretaxConsumerswillbearagreaterportionofthetaxAutomanufacturerswillbearagreaterportionofthetaxburden.Theactualincidenceofataximposedonproducersofagoodwillbeborneby:producersmorethanconsumersifdemandforthegoodislesspriceelasticthansupply.consumersmorethanproducersifthesupplyofthegoodismorepriceelasticthandemand.consumersandproducersequallybecausetheactualincidenceoftaxisunaffectedbyprice100%ContributionBreedsFactorsthatInfluencetheElasticityofAvailabilityofsubstitutes.IfgoodsubstitutesFactorsthatInfluencetheElasticityofAvailabilityofsubstitutes.Ifgoodsubstitutesareavailable,aincreaseinoneproductwillinduceconsumerstoswitchtoaRelativeamountofincomespentonthegood.Whentheportionconsumerbudgetsspentonaparticulargoodisrelativelysmall,forthatgoodwilltendtoberelativelyTimesincethepricechange.Thepriceelasticityofdemandformostproductsisgreaterinthelongrunthanintheshortrun.100%ContributionBreedsCrossCrosselasticityofdemandmeasuresthechangeinCrossCrosselasticityofdemandmeasuresthechangeinthedemandforagoodinresponsetothechangeinpriceofasubstituteorcomplementarygood.TheformulaforcalculatingcrosselasticityofdemandQA/percentchangeinquantitycrosselasticityofdemandPB/percentchangeinpriceofsubstituteorCrosselasticityofdemandispositiveforsubstitutegoods.(Example:appleandpear)Crosselasticityofdemandisnegativeforcomplement(Example:carand100%ContributionBreedsIncomeElasticityofIncomeelasticityofdemandmeasuresthesensitivityoftheIncomeElasticityofIncomeelasticityofdemandmeasuresthesensitivityofthequantityofagoodorservicedemandedtoachangeinaconsumer’sincome.TheformulaforincomeelasticityofdemandpercentchangeinquantitydemandedQ/incomeelasticityofdemandI/percentchangeinTheapplicationofIncomeNormalGoods:positiveincomeelasticity,demandriseswith(>Luxuries:highpositiveelasticity,demandrisesstronglywithincome.Necessitygoods:normalbutlowelasticity(between0～InferiorGoods:negativeincomeelasticity,demandfallswithincome100%ContributionBreedsExample:CalculatingQxd,=8,400-400Px+60I-choose$3for$50(thousands)for$20(thousands)fordQI4003 0.12ownpriceelasticityExample:CalculatingQxd,=8,400-400Px+60I-choose$3for$50(thousands)for$20(thousands)fordQI4003 0.12ownpriceelasticityofdemanddpExxPxddIE600.3incomeelasticityofxdQxdQPy1020 0.02crosspriceelasticitydpExdQyPx100%ContributionBreedsFrameworkofSSFrameworkofSS4MicroeconomicR13demandandsupply:R14demandandsupply:consumerdemand R15demandandsupply:theR16thefirmandthemarketSS5MacroeconomicR17aggregateoutput,price,andeconomicR18understandbusinessR19monetaryandfiscalSS6EconomicsinaGlobalR20internationaltradeandcapitalR21currencyexchange100%ContributionBreedsR14ConsumerChoiceTheoryR14ConsumerChoiceTheoryandUtilityUtilityBudgetSubstitutionandincomeNormalgoodsandinferior100%ContributionBreedsConsumerChoiceTheoryandUtilityFramework:consumerConsumerChoiceTheoryandUtilityFramework:consumerchoice100%ContributionBreedsUtilityBudgetLiketoCanConsumerShouldDemandConsumerChoiceConsumerchoicetheory:relatesconsumers’ConsumerChoiceConsumerchoicetheory:relatesconsumers’wantsandpreferencestothegoodsandservicestheyactuallybuy.ItmodelswhattheconsumerwouldliketoItexamineswhattheconsumercanconsumewithlimitedBysuperimposingwhattheconsumerwouldliketodoontowhattheconsumercando,wearriveatamodelofwhattheconsumerwoulddoundervariouscircumstances.Assumption:theconsumerknowshisorherowntastesandpreferencesandtendstotakerationalbundle.AxiomsofthetheoryofconsumerCompletepreferences:A>BorA<BorA=Transitivepreferences:A>BandB>Non-satiation:“moreisbetter”,A+1>A>100%ContributionBreedsUtilityUtilitytheoryexplainsconsumerbehaviorbasedonpreferencesforvariousalternativecombinationsofUtilityUtilitytheoryexplainsconsumerbehaviorbasedonpreferencesforvariousalternativecombinationsofgoods,intermsoftherelativelevelofsatisfactiontheyprovide.Utilityfunction:utility=U(QA,QB,…,QN),wherethevariablesarequantitiesconsumedofgoodsAthroughN.Utilityisanordinalmeasure,ratherthanacardinalOrdinalrankingsareweakermeasuresthancardinalrankingsbecausetheydonotallowthecalculationandrankingofthedifferencesbetweenbundles.100%ContributionBreedsIndifferenceIndifferencecurverepresentsallthecombinationsoftwogoodssuchthattheconsumerisentirelyindifferentamongthem.CharacteristicsofindifferenceIndifferencecurvesfortwogoodsslopeIndifferencecurvesareconvextowardstheIndifferencecurvescannotIndifferenceIndifferencecurverepresentsallthecombinationsoftwogoodssuchthattheconsumerisentirelyindifferentamongthem.CharacteristicsofindifferenceIndifferencecurvesfortwogoodsslopeIndifferencecurvesareconvextowardstheIndifferencecurvescannotGoodGoodA5BC43CAB21DGoodGood12345678IndifferencecurvesslopeIndifferencecurvescannot100%ContributionBreedsMarginalRateofSubstitutionMarginalrateofsubstitutiontheMarginalRateofSubstitutionMarginalrateofsubstitutiontherateatwhichtheconsumeriswillingtogiveuponeobtainanothergoods,holdingutilityconstant.MRSXY=-△Y/goodsExample：MRSXY＝3，increase1unitofGoodX,havetoup3unitsofGoodY,holdingutilitythelawofdiminishingmarginalrateofsubstitution:asonemovesdowna(standardlyconvex)indifferencecurve,themarginalrateofsubstitutiondecreases(asmeasuredbytheabsolutevalueoftheslopeoftheindifferencecurve,which100%ContributionBreedsBudgetBudgetconstraintcanbeconstructedbasedontheBudgetBudgetconstraintcanbeconstructedbasedontheconsumer’sincomeandthepricesoftheavailablegoods.ThebudgetlineshowsallcombinationsofGoodXandGoodYthatwilljustexhausttheconsumer’sincome.SlopeofBudgetconstraintisSlopeofBudgetconstraintisthepriceBudgetUnitsofGoodIncome=Px=$6PY=6UnitsofGood100%ContributionBreedsBudgetChangingThepriceofGoodYkeepsconstant:anincreaseinthepriceofGoodXpivotsthebudgetconstraintinward,becomingsteeper.ThepriceofGoodBudgetChangingThepriceofGoodYkeepsconstant:anincreaseinthepriceofGoodXpivotsthebudgetconstraintinward,becomingsteeper.ThepriceofGoodXkeepsconstant:anincreaseinthepriceofGoodYpivotsthebudgetconstraintdownward,becominglesssteep.Changingincome:anincreaseinincomeshiftsthebudgetconstraintparalleltotheoriginalPanelPanelPanelYYYXX X100%ContributionBreedsProductionOpportunityFrontierandOpportunity ProductionopportunityfrontiershowsthemaximumnumberofunitsProductionOpportunityFrontierandOpportunity Productionopportunityfrontiershowsthemaximumnumberofunitsofonegooditcanproduce,foranygivennumberoftheothergoodthatitchoosestoYX100%ContributionBreedsConsumer'sConsumerUtilityismaximized,subjecttothebudgetConsumer'sConsumerUtilityismaximized,subjecttothebudgetTangencybetweenbudgetconstraint&thehighestattainableindifferencecurveAttangentpointMRSXY（边际替代率，