中级微观经济学英文版课件：第1章 Introduction

1、Intermediate Microeconomics北京大学中国经济研究中心经济学双学位和辅修项目2003年秋IntroductionContentsInstructor and TAsRequirementsCourse outlineAn example: market for apartmentsTextbookIntermediate Microeconomics: A Modern Approach (Sixth Edition) by Hal R. VarianW. W. Norton， 2003Homework Policy几乎每次课后都有作业周二的作业在周六课前交周六的作业在

2、周二课前交课后领回作业不交或迟交作业将不得分Exam Policy两次期中，一次期末注意考试日期期中考试只考阶段内容期末考试将考全部课程内容 除极特殊情况以外，缺考者得零分 No makeup examsGrading家庭作业: 20期中考试（1）: 20期中考试（2）: 20期末考试: 40 The Theory of Economics does notfurnish a body of settled conclusionsimmediately applicable to policy. It isa method rather than a doctrine, anapparatus

3、 of the mind, a technique ofthinking which helps its possessor todraw correct conclusions- John Maynard KeynesIs Economics Useful?A thinking machineChanges the way you view life and understand problemsAn all round majorEconomics Graduates Type of EmployerPercent of GraduatesTraditional Business 23.3

4、Government 18.4Financial Business 17.7Graduate School 13.7Consulting Services 4.4Private/public School 3.9Law Firm 3.5Other 9.8Jobs for EconomistsBusiness economistsGovernment economistsAcademic economistsMicroeconomicsTheoryApplicationsLabor economicsEconomics of educationAgricultural economicsIndu

5、strial organizationsHealth economicsCourse OutlineConsumer theory (1-15)Producer theory (18-27)Market equilibrium (16-17, 30-32)Special topics on equilibriumEconomic ModelingWhat causes what in economic systems?At what level of detail shall we model an economic phenomenon?Which variables are determi

6、ned outside the model (exogenous) and which are to be determined by the model (endogenous)?Modeling the Apartment MarketHow are apartment rents determined?Suppose apartments are close or distant, but otherwise identicaldistant apartments rents are exogenous and knownmany potential renters and landlo

7、rdsModeling the Apartment MarketWho will rent close apartments?At what price?Will the allocation of apartments be desirable in any sense?How can we construct an insightful model to answer these questions?Two Principles in EconomicsOptimization: Each person tries to choose the best alternative availa

8、ble to him or her.Equilibrium: Market price adjusts until quantity demanded equals quantity supplied.Modeling Apartment DemandDemand: Suppose the most any one person is willing to pay to rent a close apartment is $500/month. Thenp = $500 QD = 1.Suppose the price has to drop to $490 before a 2nd pers

9、on would rent. Thenp = $490 QD = 2.Modeling Apartment DemandThe lower is the rental rate p, the larger is the quantity of close apartments demandedp QD .The quantity demanded vs. price graph is the market demand curve for close apartments.Market Demand Curve for ApartmentspQDModeling Apartment Suppl

10、ySupply: 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 ApartmentspQS100Competitive Market Equilibrium“low” rental price quantity demanded of close apartments exceeds quantity available price will rise.“high” ren

11、tal price quantity demanded less than quantity available price will fall.Competitive Market EquilibriumQuantity demanded = quantity available price will neither rise nor fallso the market is at a competitive equilibrium.Competitive Market EquilibriumpQD,QS100Competitive Market EquilibriumpQD,QSpe100

12、Competitive Market EquilibriumpQD,QSpe100People willing to pay pe for close apartments get closeapartments.Competitive Market EquilibriumpQD,QSpe100People willing to pay pe for close apartments get closeapartments.People not willing to pay pe for close apartments get distant apartments.Competitive M

13、arket EquilibriumQ: Who rents the close apartments?A: Those most willing to pay.Q: Who rents the distant apartments?A: Those least willing to pay.So the competitive market allocation is by “willingness-to-pay”.Comparative StaticsWhat is exogenous in the model?price of distant apartmentsquantity of c

14、lose apartmentsincomes of potential renters.What happens if these exogenous variables change?Comparative StaticsSuppose the price of distant apartment rises.Demand for close apartments increases (rightward shift), causinga higher price for close apartments.Market EquilibriumpQD,QSpe100Market Equilib

15、riumpQD,QSpe100Higher demandMarket EquilibriumpQD,QSpe100Higher demand causes highermarket price; same quantitytraded.Comparative StaticsSuppose there were more close apartments.Supply is greater, so the price for close apartments falls.Market EquilibriumpQD,QSpe100Market EquilibriumpQD,QS100Higher

16、supplypeMarket EquilibriumpQD,QSpe100Higher supply causes alower market price and alarger quantity traded.Comparative StaticsSuppose potential renters incomes rise, increasing their willingness-to-pay for close apartments.Demand rises (upward shift), causinghigher price for close apartments.Market E

17、quilibriumpQD,QSpe100Market EquilibriumpQD,QSpe100Higher incomes causehigher willingness-to-payMarket EquilibriumpQD,QSpe100Higher incomes causehigher willingness-to-pay,higher market price, andthe same quantity traded.Taxation Policy AnalysisLocal government taxes apartment owners.What happens topr

18、icequantity of close apartments rented?Is any of the tax “passed” to renters?Taxation Policy AnalysisMarket supply is unaffected.Market demand is unaffected.So the competitive market equilibrium is unaffected by the tax.Price and the quantity of close apartments rented are not changed.Landlords pay

19、all of the tax.Imperfectly Competitive MarketsAmongst many possibilities are:a monopolistic landlorda perfectly discriminatory monopolistic landlorda competitive market subject to rent control.A Monopolistic LandlordWhen the landlord sets a rental price p he rents D(p) apartments.Revenue = pD(p).Rev

20、enue is low if p 0Revenue is low if p is so high that D(p) 0.An intermediate value for p maximizes revenue.Monopolistic Market EquilibriumpQDLowpriceLow price, high quantitydemanded, low revenue.Monopolistic Market EquilibriumpQDHighpriceHigh price, low quantitydemanded, low revenue.Monopolistic Mar

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

22、edium quantitydemanded, larger revenue.Monopolist does not rent all theclose apartments.100Vacant close apartments.Perfectly Discriminatory Monopolistic LandlordImagine the monopolist knew everyones willingness-to-pay.Charge $500 to the most willing-to-pay,charge $490 to the 2nd most willing-to-pay,

23、 etc.Discriminatory Monopolistic Market EquilibriumpQD,QS100p1 =$5001Discriminatory Monopolistic Market EquilibriumpQD,QS100p1 =$500p2 =$49012Discriminatory Monopolistic Market EquilibriumpQD,QS100p1 =$500p2 =$49012p3 =$4753Discriminatory Monopolistic Market EquilibriumpQD,QS100p1 =$500p2 =$49012p3

24、=$4753Discriminatory Monopolistic Market EquilibriumpQD,QS100p1 =$500p2 =$49012p3 =$4753peDiscriminatory monopolistcharges the competitive marketprice to the last renter, andrents the competitive quantityof close apartments.Rent ControlLocal government imposes a maximum legal price, pmax pe, the com

25、petitive price.Market EquilibriumpQD,QSpe100Market EquilibriumpQD,QSpe100pmaxMarket EquilibriumpQD,QSpe100pmaxExcess demandMarket EquilibriumpQD,QSpe100pmaxExcess demandThe 100 close apartments areno longer allocated bywillingness-to-pay (lottery, lines,large families first?).Which Market Outcomes A

26、re Desirable?Which is better?Rent controlPerfect competitionMonopolyDiscriminatory monopolyPareto EfficiencyVilfredo Pareto; 1848-1923.A Pareto outcome allows no “wasted welfare”;i.e. the only way one persons welfare can be improved is to lower another persons welfare. Pareto EfficiencyJill has an a

27、partment; Jack does not.Jill values the apartment at $200; Jack would pay $400 for it.Jill could sublet the apartment to Jack for $300.Both gain, so it was Pareto inefficient for Jill to have the apartment.Pareto EfficiencyA Pareto inefficient outcome means there remain unrealized mutual gains-to-trade.Any market outcome that achieves all possible gains-to-trade must be Pareto efficient.Pareto EfficiencyCompetitive equilibrium:all close apartment renters value them at the market price pe or moreall others value close