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CH. 5 Demand and consumer behavior,Choice and utility theory Fundamental premise: people tend to choose those goods and services they value most highly.,Preference 偏好,Property: complete(完全的) transitive(可传递的) more is better(多比少好),Some concepts,Utility(效用) Utility function(效用函数) Marginal utility(边际效用),The Law of Diminishing Marginal Utility,the law of diminishing marginal utility,Marginal utility declines as a person consumes more and more of a good.,Ordinal utility(序数效用),The preference ranking of bundles of commodities.,Equimarginal principle均衡原则,Marginal utility of income,The additional utility that would be gained if the consumer could enjoy an extra dollars worth of consumption.,Why demand curve slope downward,Leisure and the optimal allocation of time,The indifference curve(无差异曲线),the set of consumption bundles among which the consumer is indifferent, all are equally desirable,Indifference Curves for a Pair of Goods,Convex to the origin(凸向原点),The law of substitution(替代规律):the scarcer a good, the greater its relative substitution value; its marginal utility rises relative to the marginal utility of the good that has become plentiful.,Substitution ratio (marginal substitution ratio),The indifference map,Budget line or budget constraint(预算线或预算约束),given the prices of goods, all the possible combinations of the two goods that would exhaust the consumers income the slope of budget line,Income Constrains Consumer Spending,Consumers Most Preferred and Feasible Consumption Bundle Is Attained at B,The equilibrium position of tangency,The changes in income and price(收入与价格的变化),Income change: Single price change:,Effect of Income Change on Equilibrium,Effect of Price Change on Equilibrium,Deriving demand curve,推导需求曲线 Offer curve(提供曲线或价格消费曲线),An alternative approach:,Substitution effect(替代效应):when the price of a good rises, consumers will tend to substitute other goods for the more expensive good .,Income effect (收入效应):,the impact of a price change on a goods quantity demanded that results from the effect of the price change on consumers real incomes.,Income elasticity:,the percentage change in quantity demanded/the percentage change in income, holding other things.,From individual to market demand:,summing up the quantities demanded by all the consumers,Market Demand Derived from Individual Demands,Demand shifts:,Substitutes(替代品): Complements(互补品): Independence goods(独立品): Perfect substitutes(完全替代): Perfect complements(完全互补),Demand Curve Shifts with Changes in Income or in Other Goods Prices,The economics of addiction 上瘾物品的经济学,Merit goods(益品): Demerit goods(害品): Demand for addictive substances is very price-inelastic. Figure 5-4,Demand for Addictive Substances by Hard-Core Users,Demand for Addictive Substances by Casual Users,The paradox of value (价值悖论),Water and diamond 水与钻石 Supply and demand Marginal utility:,Consumer surplus消费者剩余,The gap between the total utility of a good and its total market value is called consumer surplus. We receive more than we pay for as a result of the law of diminishing marginal utility.,Because of Diminishing Marginal Utility, Consumers Satisfaction Exceeds W
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