中级微观经济学英文版课件：第31章 生产

1、Chapter Thirty-OneProduction生产Exchange Economies (revisited)No production, only endowments, so no description of how resources are converted to consumables.General equilibrium: all markets clear simultaneously.1st and 2nd Fundamental Theorems of Welfare Economics.Now Add Production .Add input market

2、s, output markets, describe firms technologies, the distributions of firms outputs and profits Thats not easy!ContentsA one-person economyOptimal outcomeCompetitive equilibriumTwo welfare theoremsNon-convex technologiesTwo-people economyProduction possibility frontierComparative advantagePareto effi

3、cient allocationCompetitive equilibriumRobinson Crusoes EconomyOne agent, RC.Endowed with a fixed quantity of one resource - 24 hours.Use time for labor (production) or leisure (consumption).Labor time = L. Leisure time = 24 - L.What will RC choose?Robinson Crusoes TechnologyTechnology: Labor produc

4、es output (coconuts) according to a concave production function.Robinson Crusoes TechnologyProduction functionLabor (hours)Coconuts240Robinson Crusoes TechnologyLabor (hours)CoconutsProduction function240Feasible productionplansRobinson Crusoes PreferencesRCs preferences:coconut is a goodleisure is

5、a goodRobinson Crusoes PreferencesLeisure (hours)CoconutsMore preferred240Robinson Crusoes PreferencesLeisure (hours)CoconutsMore preferred240Robinson Crusoes ChoiceLabor (hours)CoconutsFeasible productionplansProduction function240Robinson Crusoes ChoiceLabor (hours)CoconutsFeasible productionplans

6、Production function240Leisure (hours)240Robinson Crusoes ChoiceLabor (hours)CoconutsFeasible productionplansProduction function240Leisure (hours)240Robinson Crusoes ChoiceLabor (hours)CoconutsFeasible productionplansProduction function240Leisure (hours)240Robinson Crusoes ChoiceLabor (hours)Coconuts

7、Production function240Leisure (hours)240C*L*Robinson Crusoes ChoiceLabor (hours)CoconutsProduction function240Leisure (hours)240C*L*LaborRobinson Crusoes ChoiceLabor (hours)CoconutsProduction function240Leisure (hours)240C*L*LaborLeisureRobinson Crusoes ChoiceLabor (hours)CoconutsProduction function

8、240Leisure (hours)240C*L*LaborLeisureOutputRobinson Crusoes ChoiceLabor (hours)CoconutsProduction function240Leisure (hours)240C*L*LaborLeisureMRS = MPLOutputCompetitive EquilibriumA firmProduce coconutsDemand laborA consumerDemand coconutsSupply laborEquilibriumMarket clears for coconutsMarket clea

9、rs for laborCompetitive EquilibriumNow suppose RC is both a utility-maximizing consumer and a profit-maximizing firm.Use coconuts as the numeraire good; i.e. price of a coconut = $1.RCs wage rate is w.Coconut output level is C.Labor supply is L.Robinson Crusoe as a FirmRCs firms profit is = C - wL.

10、= C - wL C = + wL, the equation of an isoprofit line.Slope = + w .Intercept = .Isoprofit LinesLabor (hours)Coconuts24Higher profit; Slopes = + w0Profit-MaximizationLabor (hours)CoconutsFeasible productionplansProduction function240Profit-MaximizationLabor (hours)CoconutsProduction function240Profit-

11、MaximizationLabor (hours)CoconutsProduction function240Profit-MaximizationLabor (hours)CoconutsProduction function24C*L*Isoprofit slope = production function slope0Profit-MaximizationLabor (hours)CoconutsProduction function24C*L*Isoprofit slope = production function slope i.e. w = MPL = 1 MPL = MRPL

12、.0Profit-MaximizationLabor (hours)CoconutsProduction function24C*L*Isoprofit slope = production function slope i.e. w = MPL = 1 MPL = MRPL.RC gets 0Profit-MaximizationLabor (hours)CoconutsProduction function24C*L*Isoprofit slope = production function slope i.e. w = MPL = 1 MPL = MRPL.Given w, RCs fi

13、rms quantitydemanded of labor is L*LabordemandRC gets 0Profit-MaximizationLabor (hours)CoconutsProduction function24C*L*Isoprofit slope = production function slope i.e. w = MPL.Given w, RCs firms quantitydemanded of labor is L* andoutput quantity supplied is C*.LabordemandOutputsupplyRC gets 0Utilit

14、y-MaximizationNow consider RC as a consumer endowed with $* who can work for $w per hour.What is RCs most preferred consumption bundle?Budget constraint isUtility-MaximizationLabor (hours)Coconuts240Budget constraint; slope = wUtility-MaximizationLabor (hours)CoconutsMore preferred240Utility-Maximiz

15、ationLabor (hours)Coconuts240Budget constraint; slope = wUtility-MaximizationLabor (hours)CoconutsBudget constraint; slope = w240Utility-MaximizationLabor (hours)Coconuts240C*L*MRS = wBudget constraint; slope = wUtility-MaximizationLabor (hours)Coconuts240C*L*LaborsupplyBudget constraint; slope = wM

16、RS = wGiven w, RCs quantitysupplied of labor is L*Utility-MaximizationLabor (hours)Coconuts240C*L*Given w, RCs quantitysupplied of labor is L* andoutput quantity demanded is C*.LaborsupplyOutputdemandBudget constraint; slope = wMRS = wUtility-Maximization & Profit-MaximizationProfit-maximization: w

17、= MPLquantity of output supplied = C*quantity of labor demanded = L*Utility-maximization: w = MRSquantity of output demanded = C*quantity of labor supplied = L*Coconut and labor markets both clear.At Equilibrium Labor (hours)Coconuts24C*L*0MRS = w = MPLGiven w, RCs quantitysupplied of labor = quanti

18、tydemanded of labor = L* andoutput quantity demanded =output quantity supplied = C*.Pareto EfficiencyMust have MRS = MPL.Pareto EfficiencyLabor (hours)Coconuts240MRS MPLPareto EfficiencyLabor (hours)Coconuts240MRS MPLPreferred consumptionbundles.Pareto EfficiencyLabor (hours)Coconuts240MRS = MPLPare

19、to EfficiencyLabor (hours)Coconuts240MRS = MPL. The common slope relative wage rate w that implements the Pareto efficient plan by decentralized pricing.First Fundamental Theorem of Welfare EconomicsA competitive market equilibrium is Pareto efficient ifthere are no externalities in consumption or p

20、roduction.Second Fundamental Theorem of Welfare EconomicsAny Pareto efficient economic state can be achieved as a competitive market equilibrium ifconsumers preferences are convexfirms technologies are convexNon-Convex TechnologiesDo the Welfare Theorems hold if firms have non-convex technologies?Th

21、e 1st Theorem does not rely upon firms technologies being convex.Non-Convex TechnologiesLabor (hours)Coconuts240MRS = MPL The common slope relative wage rate w that implements the Pareto efficient plan by decentralized pricing.Non-Convex TechnologiesDo the Welfare Theorems hold if firms have non-con

22、vex technologies?The 2nd Theorem does require that firms technologies be convex.Non-Convex TechnologiesLabor (hours)Coconuts240MRS = MPL. The Pareto optimal allocation cannot be implemented by a competitive equilibrium.Production PossibilitiesResource and technological limitations restrict what an e

23、conomy can produce.The set of all feasible output bundles is the economys production possibility set (生产可能性集).The sets outer boundary is the production possibility frontier（生产可能性边界）.Production PossibilitiesFishCoconutsProduction possibility frontier (ppf)Production PossibilitiesFishCoconutsProductio

24、n possibility frontier (ppf)Production possibility setProduction PossibilitiesFishCoconutsFeasible butinefficientProduction PossibilitiesFishCoconutsFeasible butinefficientFeasible and efficientProduction PossibilitiesFishCoconutsFeasible butinefficientFeasible and efficientInfeasibleProduction Poss

25、ibilitiesFishCoconutsPpfs slope is the marginal rateof product transformation (边际生产转换率), or marginal rate of transformation (边际转换率).Production PossibilitiesFishCoconutsPpfs slope is the marginal rateof product transformation.Increasingly negative MRPT increasing opportunitycost to specialization.Pro

26、duction PossibilitiesIf there are no production externalities then a ppf will be concave w.r.t. the origin.Why?Because efficient production requires exploitation of comparative advantages(比较优势).Comparative AdvantageTwo agents, RC and Man Friday (MF).RC can produce at most 20 coconuts or 30 fish.MF c

27、an produce at most 50 coconuts or 25 fish.Comparative AdvantageFCFCRCMF20503025Comparative AdvantageFCFCRCMF20503025MRPT = -2/3 coconuts/fish so opp. cost of onemore fish is 2/3 foregone coconuts.Comparative AdvantageFCFCRCMF20503025MRPT = -2/3 coconuts/fish so opp. cost of onemore fish is 2/3 foreg

28、one coconuts.MRPT = -2 coconuts/fish so opp. cost of onemore fish is 2 foregone coconuts.Comparative AdvantageFCFCRCMF20503025MRPT = -2/3 coconuts/fish so opp. cost of onemore fish is 2/3 foregone coconuts.MRPT = -2 coconuts/fish so opp. cost of onemore fish is 2 foregone coconuts.RC has the compara

29、tiveopp. cost advantage inproducing fish.Comparative AdvantageFCFCRCMF20503025MRPT = -2/3 coconuts/fish so opp. cost of onemore coconut is 3/2 foregone fish.Comparative AdvantageFCFCRCMF20503025MRPT = -2/3 coconuts/fish so opp. cost of onemore coconut is 3/2 foregone fish.MRPT = -2 coconuts/fish so

30、opp. cost of onemore coconut is 1/2 foregone fish.Comparative AdvantageFCFCRCMF20503025MRPT = -2/3 coconuts/fish so opp. cost of onemore coconut is 3/2 foregone fish.MRPT = -2 coconuts/fish so opp. cost of onemore coconut is 1/2 foregone fish.MF has the comparativeopp. cost advantage inproducing coc

31、onuts.Supplement: TradeFCFCRCMF20503025Autarky: Produce and consume at A.Trade: Both countries completely specialize. RC specializes on Fish; MF specializes on coconuts.Produce at B and consume at C. Better off with trade.ABCABCSupplement: Trade EquilibriumFCFCRCMF20503025Prices adjust to clear the

32、markets.At equilibrium, export of one country = import of the other country for each product.ooComparative AdvantageFCEconomyFCFCRCMF2050302570555030Use RC to producefish before using MF.Use MF toproducecoconuts before using RC.Comparative AdvantageFCEconomyFCFCRCMF2050302570555030Using low opp. cos

33、tproducers first resultsin a ppf that is concave w.r.t the origin.Comparative AdvantageFCEconomyMore producers withdifferent opp. costs“smooth out” the ppf.Coordinating Production & ConsumptionThe ppf contains many technically efficient output bundles.Which are Pareto efficient?Coordinating Producti

34、on & ConsumptionFishCoconutsOutput bundle isCoordinating Production & ConsumptionFishCoconutsOutput bundle isand is the aggregateendowment for distribution to consumers RC and MF.Coordinating Production & ConsumptionFishCoconutsORCOMFOutput bundle isand is the aggregateendowment for distribution to

35、consumers RC and MF.Coordinating Production & ConsumptionFishCoconutsORCOMFAllocate efficiently;say to RCCoordinating Production & ConsumptionFishCoconutsORCOMFAllocate efficiently;say to RC and to MF.Coordinating Production & ConsumptionFishCoconutsORCOMFCoordinating Production & ConsumptionFishCoc

36、onutsORCOMFCoordinating Production & ConsumptionFishCoconutsORCOMFCoordinating Production & ConsumptionFishCoconutsORCOMFMRS MRPTCoordinating Production & ConsumptionFishCoconutsORCOMFOMFInstead produceCoordinating Production & ConsumptionFishCoconutsORCOMFOMFInstead produceCoordinating Production &

37、 ConsumptionFishCoconutsORCOMFOMFInstead produceGive MF same allocation as before.Coordinating Production & ConsumptionFishCoconutsORCOMFOMFInstead produceGive MF same allocation as before. MFs utility is unchanged.Coordinating Production & ConsumptionFishCoconutsORCOMFOMFInstead produceGive MF same

38、 allocation as before. MFs utility is unchangedCoordinating Production & ConsumptionFishCoconutsORCOMFOMFInstead produceGive MF same allocation as before. MFs utility is unchangedCoordinating Production & ConsumptionFishCoconutsORCOMFOMFInstead produceGive MF same allocation as before. MFs utility i

39、s unchanged, RCs utility is higherCoordinating Production & ConsumptionFishCoconutsORCOMFOMFInstead produceGive MF same allocation as before. MFs utility is unchanged, RCs utility is higher; Pareto improvement.Coordinating Production & ConsumptionMRS MRPT inefficient coordination of production and c

40、onsumption.Hence, MRS = MRPT is necessary for a Pareto optimal economic state.Coordinating Production & ConsumptionFishCoconutsORCOMFDecentralized Coordination of Production & Consumption RC and MF jointly run a firm producing coconuts and fish.RC and MF are also consumers who can sell labor.Price o

41、f coconut = pCPrice of fish = pFRCs wage rate = wRCMFs wage rate = wMFDecentralized Coordination of Production & ConsumptionLRC, LMF are amounts of labor purchased from RC and MF.Firms profit-maximization problem is choose C, F, LRC and LMF toA SimplificationSuppose labor market equilibrium is already achieved.Allows us to focus on the product market.Technically, can simultaneously look at all the