中级微观-第一次课件.ppt

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1、中级微观经济学Spring,2006Qiang G助教u陆利平陆利平 u张红松张红松 u杨希杨希 u章椹元章椹元 zhangshy_教材Intermediate Microeconomics:A Modern Approach(Sixth Edition)by Hal R.VarianW.W.Norton，2003HomeworkuDue:MondayuTA sessionuOffice hour考试u两次测验，一次期中，一次期末两次测验，一次期中，一次期末u注意考试日期注意考试日期u测验和期中考试只考阶段内容测验和期中考试只考阶段内容u期末考试将考全部课程内容期末考试将考全部课程内容 u除极

2、特殊情况以外，缺考者得零分除极特殊情况以外，缺考者得零分 u没有补考或者缓考没有补考或者缓考成绩uAssignment 20%uExamination 70%20%Midterm 30%Final20%:50%*max(Midterm,Final)+50%*FinaluIn class quizzes 10%uTerm paper(not required)?Score by rankinguHonor codeThe Theory of Economics does notfurnish a body of settled conclusionsimmediately applicable

3、to policy.It isa method rather than a doctrine,anapparatus of the mind,a technique ofthinking which helps its possessor todraw correct conclusions-John Maynard KeynesIs Economics Useful?uBecoming a thinkeruChanges the way you view life and understand problemsuAn all round majorEconomics Graduates Ty

4、pe of Employer%GraduatesTraditional Business 23.3Government 18.4Financial Business 17.7Graduate School 13.7Consulting Services 4.4Private/public School 3.9Law Firm 3.5Other 9.8Jobs for EconomistsuBusiness economistsuGovernment economistsuAcademic economistsMacroeconomicsMicroeconomicsManagementCount

5、ry Level Industry LevelIndividual&Firm levelMicroeconomicsuTheoryuApplicationsLabor economicsEconomics of educationDevelopment economicsAgricultural economicsIndustrial organizationsHealth economicsCourse OutlineuConsumer theory(1-15)uProducer theory(18-27)uMarket equilibrium(16-17,30-32)uSpecial to

6、pics on equilibriumEconomic ModelinguWhat causes what in economic systems?Which variables are determined outside the model(exogenous)Which variables are to be determined by the model(endogenous)uAt what level of detail shall we model an economic phenomenon?Modeling the Apartment MarketuCentral quest

7、ion:How are apartment rents determined?uSuppose(simplifying assumptions)apartments are close or distant,but otherwise identicaldistant apartments rents are exogenous and knownmany potential renters and landlords,i.e.,competitive marketA Normative QuestionuWill the allocation of apartments be desirab

8、le?uNeed to know:Who will rent close apartments?At what price?Two Principles in EconomicsuOptimization:Each person tries to choose the best alternative available to him or her.uEquilibrium:Market price adjusts until quantity demanded equals quantity supplied.Modeling Individual DemanduDiscrete commo

9、dity:0 or 1 unituChoose either distant or close apartmentuClose apartments are more desirable but more expensiveuTend to choose close apartment ifDistant apartments are also expensive.Higher income.uDecide:The maximum rent you are willing to pay for a close apartment.Modeling Market DemanduDemand:Su

10、ppose the most any one person is willing to pay to rent a close apartment is$500/month.Thenp=$500 QD=1.uSuppose the price has to drop to$490 before a 2nd person would rent.Thenp=$490 QD=2.Modeling Apartment DemanduThe lower is the rental rate p,the larger is the quantity of close apartments demanded

11、p QD .uThe quantity demanded vs.price graph is the market demand curve for close apartments.Market Demand Curve for ApartmentspQDModeling Apartment SupplyuSupply:It takes time to build more close apartments so in this short-run the quantity available is fixed(at say 100).Market Supply Curve for Apar

12、tmentspQS100Competitive Market Equilibriumu“low”rental price quantity demanded of close apartments exceeds quantity available price will rise.u“high”rental price quantity demanded less than quantity available price will fall.Competitive Market EquilibriumuQuantity demanded=quantity available price w

13、ill neither rise nor falluso the market is at a competitive equilibrium.Competitive Market EquilibriumpQD,QS100Competitive Market EquilibriumpQD,QSpe100Competitive Market EquilibriumpQD,QSpe100People willing to pay pe for close apartments get closeapartments.Competitive Market EquilibriumpQD,QSpe100

14、People willing to pay pe for close apartments get closeapartments.People not willing to pay pe for close apartments get distant apartments.Competitive Market EquilibriumuQ:Who rents the close apartments?uA:Those most willing to pay.uQ:Who rents the distant apartments?uA:Those least willing to pay.uS

15、o the competitive market allocation is by“willingness-to-pay”.Comparative StaticsuWhat is exogenous in the model?price of distant apartmentsquantity of close apartmentsincomes of potential renters.uWhat happens if these exogenous variables change?Comparative StaticsuSuppose the price of distant apar

16、tment rises.uDemand for close apartments increases(rightward shift),causingua higher price for close apartments.Market EquilibriumpQD,QSpe100Market EquilibriumpQD,QSpe100Higher demandMarket EquilibriumpQD,QSpe100Higher demand causes highermarket price;same quantitytraded.Comparative StaticsuSuppose

17、there were more close apartments.uSupply is greater,so uthe price for close apartments falls.Market EquilibriumpQD,QSpe100Market EquilibriumpQD,QS100Higher supplypeMarket EquilibriumpQD,QSpe100Higher supply causes alower market price and alarger quantity traded.Comparative StaticsuSuppose potential

18、renters incomes rise,increasing their willingness-to-pay for close apartments.uDemand rises(upward shift),causing higher price for close apartments.Market EquilibriumpQD,QSpe100Market EquilibriumpQD,QSpe100Higher incomes causehigher willingness-to-payMarket EquilibriumpQD,QSpe100Higher incomes cause

19、higher willingness-to-pay,higher market price,andthe same quantity traded.Imperfectly Competitive MarketsuAmongst many possibilities are:a monopolistic landlorda perfectly discriminatory monopolistic landlorda competitive market subject to rent control.A Monopolistic LandlorduWhen the landlord sets

20、a rental price p he rents D(p)apartments.uRevenue=pD(p).uRevenue is low if p 0uRevenue is low if p is so high that D(p)0.uAn intermediate value for p maximizes revenue.Monopolistic Market EquilibriumpQDLowpriceLow price,high quantitydemanded,low revenue.Monopolistic Market EquilibriumpQDHighpriceHig

21、h price,low quantitydemanded,low revenue.Monopolistic Market EquilibriumpQDMiddlepriceMiddle price,medium quantitydemanded,larger revenue.Monopolistic Market EquilibriumpQD,QSMiddlepriceMiddle price,medium quantitydemanded,larger revenue.Monopolist does not rent all theclose apartments.100Monopolist

22、ic Market EquilibriumpQD,QSMiddlepriceMiddle price,medium quantitydemanded,larger revenue.Monopolist does not rent all theclose apartments.100Vacant close apartments.Perfectly Discriminatory Monopolistic LandlorduImagine the monopolist knew everyones willingness-to-pay.uCharge$500 to the most willin

23、g-to-pay,ucharge$490 to the 2nd most willing-to-pay,etc.Discriminatory Monopolistic Market EquilibriumpQD,QS100p1=$5001Discriminatory Monopolistic Market EquilibriumpQD,QS100p1=$500p2=$49012Discriminatory Monopolistic Market EquilibriumpQD,QS100p1=$500p2=$49012p3=$4753Discriminatory Monopolistic Mar

24、ket EquilibriumpQD,QS100p1=$500p2=$49012p3=$4753Discriminatory Monopolistic Market EquilibriumpQD,QS100p1=$500p2=$49012p3=$4753peDiscriminatory monopolistcharges the competitive marketprice to the last renter,andrents the competitive quantityof close apartments.Rent ControluLocal government imposes

25、a maximum legal price,pmax pe,the competitive price.Market EquilibriumpQD,QSpe100Market EquilibriumpQD,QSpe100pmaxMarket EquilibriumpQD,QSpe100pmaxExcess demandMarket EquilibriumpQD,QSpe100pmaxExcess demandThe 100 close apartments areno longer allocated bywillingness-to-pay(lottery,lines,large famil

26、ies first?).Which Market Outcomes Are Desirable?uWhich is better?Rent controlPerfect competitionMonopolyDiscriminatory monopolyPareto EfficiencyuVilfredo Pareto;1848-1923.uA Pareto outcome allows no“wasted welfare”;ui.e.the only way one persons welfare can be improved is to lower another persons wel

27、fare.Pareto EfficiencyuJill has an apartment;Jack does not.uJill values the apartment at$200;Jack would pay$400 for it.uJill could sublet the apartment to Jack for$300.uBoth gain,so it was Pareto inefficient for Jill to have the apartment.Criterion for Pareto EfficiencyuA Pareto inefficient outcome

28、means there remain unrealized mutual gains-to-trade.uAny market outcome that achieves all possible gains-to-trade must be Pareto efficient.Pareto EfficiencyuCompetitive equilibrium:all close apartment renters value them at the market price pe or moreall others value close apartments at less than pes

29、o no mutually beneficial trades remainso the outcome is Pareto efficient.Pareto EfficiencyuDiscriminatory Monopoly:assignment of apartments is the same as with the perfectly competitive marketso the discriminatory monopoly outcome is also Pareto efficient.Pareto EfficiencyuMonopoly:not all apartment

30、s are occupiedso a distant apartment renter could be assigned a close apartment and have higher welfare without lowering anybody elses welfare.so the monopoly outcome is Pareto inefficient.Pareto EfficiencyuRent Control:some close apartments are assigned to renters valuing them at below the competit

31、ive price pesome renters valuing a close apartment above pe dont get close apartmentsPareto inefficient outcome.Harder QuestionsuOver time,willthe supply of close apartments increase?rent control decrease the supply of apartments?a monopolist supply more apartments than a competitive rental market?Testing HypothesesuWhat cause rents to change?price of distant apartmentsincomes of potential rentersquantity of close apartments.uNeed econometrics