帕金经济学第9版课件Ch089electure

CHAPTER1CHAPTER1帕金经济学第9版课件Ch089electureYouwantColdplay’slatesthitalbum,VivalaVida,andyouwanttheJustinTimberlakeandMadonnasingle,FourMinutes.Willyoudownloadthealbumandthesingle?OrwillyoubuytwoCDs?OrwillyoubuythealbumonaCDanddownloadthesingle?Whatdeterminesourchoicesasbuyersofrecordedmusic?Youknowthatdiamondsareexpensiveandwaterischeap.Doesn’tthatseemodd?Whydoweplaceahighervalueonuselessdiamondsthanonessential-to-lifewater?YouwantColdplay’slatesthitPreferencesAhousehold’spreferencesdeterminethebenefitsorsatisfactionapersonreceivesconsumingagoodorservice.Thebenefitorsatisfactionfromconsumingagoodorserviceiscalledutility.TotalUtilityTotalutilityisthetotalbenefitapersongetsfromtheconsumptionofgoods.Generally,moreconsumptiongivesmoreutility.MaximizingUtilityPreferencesMaximizingUtilityTable8.1providesanexampleoftotalutilityschedule.Totalutilityfromagoodincreasesasthequantityofthegoodincreases.Forexample,asthenumberofmoviesseeninamonthincreases,totalutilityfrommoviesincreases.MaximizingUtilityTable8.1providesanexample帕金经济学第9版课件Ch089electureMarginalUtilityMarginalutilityisthechangeintotalutilitythatresultsfromaone-unitincreaseinthequantityofagoodconsumed.Asthequantityconsumedofagoodincreases,themarginalutilityfromconsumingitdecreases.Wecallthisdecreaseinmarginalutilityasthequantityofthegoodconsumedincreasestheprincipleofdiminishingmarginalutility.MaximizingUtilityMarginalUtilityMaximizingUtiTable8.1providesanexampleofmarginalutilityschedule.Marginalutilityfromagooddecreasesasthequantityofthegoodincreases.Forexample,asthenumberofmoviesseeninamonthincreases,marginalutilityfrommoviesdecreases.MaximizingUtilityTable8.1providesanexampleFigure8.1(a)showsatotalutilitycurveforsoda.Totalutilityincreaseswiththeconsumptionofasodaincreases.MaximizingUtilityFigure8.1(a)showsatotalut帕金经济学第9版课件Ch089electureFigure8.1(b)illustratesdiminishingmarginalutility.Asthequantityofsodaincreases,themarginalutilityfromsodadiminishes.MaximizingUtilityFigure8.1(b)illustratesdimi帕金经济学第9版课件Ch089electureThekeyassumptionofmarginalutilitytheoryisthatthehouseholdchoosestheconsumptionpossibilitythatmaximizestotalutility.TheUtility-MaximizingChoiceWecanfindtheutility-maximizingchoicebylookingatthetotalutilitythatarisesfromeachaffordablecombination.Theutility-maximizingcombinationiscalledaconsumerequilibrium.MaximizingUtilityThekeyassumptionofmarginalTable8.2showsLisa’sutility-maximizingchoice.Lisahas$40amonthtospendonmoviesandsoda.Thepriceofamovieis$8andthepriceofsodais$4acase.EachrowofthetableshowsacombinationofmoviesandsodathatexhaustsLisa’s$40.MaximizingUtilityTable8.2showsLisa’sutility帕金经济学第9版课件Ch089electureLisachoosesthecombinationthatgivesherthehighesttotalutility.Lisamaximizeshertotalutilitywhenshesees

2moviesanddrinks6casesofsodaamonth.Lisagets90unitsofutilityfromthe2moviesand225unitsofutilityfromthe6casesofsoda.MaximizingUtilityLisachoosesthecombinationtChoosingattheMarginAconsumer’stotalutilityismaximizedbyfollowingtherule:

Spendallavailableincome.

Equalizethemarginalutilityperdollarforallgoods.Themarginalutilityperdollaristhemarginalutilityfromagooddividedbyitsprice.MaximizingUtilityChoosingattheMarginMaximiziTheUtility-MaximizingRule:CallthemarginalutilityofmoviesMUM.CallthemarginalutilityofsodaMUS.CallthepriceofmoviesPM.CallthepriceofsodaPS.ThemarginalutilityperdollarfromseeingmoviesisMUM/PM.ThemarginalutilityperdollarfromsodaisMUS/PS.MaximizingUtilityTheUtility-MaximizingRule:MTotalutilityismaximizedwhen:MUM/PM=MUS/PSTable8.3showswhytheutility-maximizingruleworks.Thecombinationiseachrowisaffordable(costs$40).InrowC,MUM/PM=MUS/PS=5.

MaximizingUtilityTotalutilityismaximizedwhe帕金经济学第9版课件Ch089electureIfMUM/PM>MUS/PS,

thenspendlessonsodaandmoreonmovies.MUMdecreasesandMUSincreases.Onlywhen

MUM/PM=MUS/PS,

isitnotpossibletoreallocatethebudgetandincreasetotalutility.MaximizingUtilityIfMUM/PM>MUS/PS,MaximizingIfMUS/PS>MUM/PM,thenspendmoreonsodaandlessonmovies.MUSdecreasesandMUMincreases.Onlywhen

MUM/PM=MUS/PS,

isitnotpossibletoreallocatethebudgetandincreasetotalutility.MaximizingUtilityIfMUS/PS>MUM/PM,MaximizingAFallinthePriceofaMovieWhenthepriceofagoodfallsthequantitydemandedofthatgoodincreases—thedemandcurveslopesdownward.Forexample,ifthepriceofamoviefalls,weknowthatMUM/PMrises,sobeforetheconsumerchangesthequantitiesbought,MUM/PM>MUS/PS.

Torestoreconsumerequilibrium(maximumtotalutility)theconsumerincreasesthemoviesseentodrivedowntheMUM

andrestoreMUM/PM=MUS/PS.PredictionsofMarginalUtilityTheoryAFallinthePriceofaMovieAchangeinthepriceofonegoodchangesthedemandforanothergood.You’veseenthatifthepriceofamoviefalls,MUM/PMrises,sobeforetheconsumerchangesthequantitiesconsumed,MUM/PM>MUS/PS.

Torestoreconsumerequilibrium(maximumtotalutility)theconsumerdecreasesthequantityofsodaconsumedtodriveuptheMUS

andrestoreMUM/PM=MUS/PS.PredictionsofMarginalUtilityTheoryAchangeinthepriceofonegTable8.4showsLisa’saffordablecombinationswhenthepriceofamovieis$4.BeforeLisachangeswhatshebuys MUM/PM>MUS/PS.Tomaximizehertotalutility,Lisaseesmoremoviesanddrinkslesssoda.PredictionsofMarginalUtilityTheoryTable8.4showsLisa’safforda帕金经济学第9版课件Ch089electureFigure8.2illustratesthesepredictions.Afallinthepriceofamovieincreasesthequantityofmoviesdemanded—amovementalongthedemandcurveformovies,anddecreasesthedemandforsoda—ashiftofthedemandcurveforsoda.PredictionsFigure8.2illustratesthesep帕金经济学第9版课件Ch089electureARiseinthePriceofSodaNowsupposethepriceofsodarises.WeknowthatMUS/PSfalls,sobeforetheconsumerchangesthequantitiesbought,MUS/PS<MUM/PM.

Torestoreconsumerequilibrium(maximumtotalutility)theconsumerdecreasesthequantityofsodaconsumedtodriveuptheMUS

andincreasesthequantityofmoviesseentodrivedownMUM.

ThesechangesrestoreMUM/PM=MUS/PS.PredictionsofMarginalUtilityTheoryARiseinthePriceofSodaPreTable8.5showsLisa’saffordablecombinationswhenthepriceofsodais$8acaseandamovieisis$4.BeforeLisachangeswhatshebuys MUM/PM<MUS/PS.Tomaximizehertotalutility,Lisadrinkslesssoda.PredictionsofMarginalUtilityTheoryTable8.5showsLisa’safforda帕金经济学第9版课件Ch089electureFigure8.3illustratesthesepredictions.Ariseinthepriceofsodadecreasesthequantityofsodademanded—amovementalongthedemandcurveforsoda.PredictionsofMarginalUtilityTheoryFigure8.3illustratesthesep帕金经济学第9版课件Ch089electureARiseinIncomeWhenincomeincreases,thedemandforanormalgoodincreases.Giventhepricesofmoviesandsoda,whenLisa’sincomeincreasesfrom$40amonthto$56amonth,shebuysmoremoviesandmoresoda.Moviesandsodaarenormalgoods.Table8.6showsthesepredictions.PredictionsofMarginalUtilityTheoryARiseinIncomePredictionsofTable8.6showsLisa’saffordablecombinationswhenshehas$56tospend.With$40tospend,Lisasees6moviesanddrinks

4casesofsodaamonth.With$56tospend,Lisaspendstheextra$16.Shesees8moviesanddrinks6casesofsodaamonth.PredictionsofMarginalUtilityTheoryTable8.6showsLisa’safforda帕金经济学第9版课件Ch089electureFigure8.4illustratesthesepredictions.PredictionsofMarginalUtilityTheoryFigure8.4illustratesthesep帕金经济学第9版课件Ch089electure帕金经济学第9版课件Ch089electureTheParadoxofValueTheparadoxofvalue“Whyiswater,whichisessentialtolife,farcheaperthandiamonds,whicharenotessential?〞isresolvedbydistinguishingbetweentotalutilityandmarginalutility.Weusesomuchwaterthatthemarginalutilityfromwaterconsumedissmall,butthetotalutilityislarge.Webuyfewdiamonds,sothemarginalutilityfromdiamondsislarge,butthetotalutilityissmall.PredictionsofMarginalUtilityTheoryTheParadoxofValuePredictionForwater,thepriceislow,totalutilityislarge,andmarginalutilityissmall.Fordiamonds,thepriceishigh,totalutilityissmall,andmarginalutilityishigh.Butmarginalutilityperdollaristhesameforwateranddiamonds.PredictionsForwater,thepriceislow,tValueandConsumerSurplusThesupplyofwaterisperfectlyelastic,sothequantityofwaterconsumedislargeandtheconsumersurplusfromwaterislarge.Incontrast,thesupplyofdiamondsinperfectlyinelastic,sothepriceishighandtheconsumersurplusfromdiamondsissmall.PredictionsValueandConsumerSurplusPred帕金经济学第9版课件Ch089electureTemperature:AnAnalogyUtilityissimilartotemperature.Bothareabstractconcepts,andbothhaveunitsofmeasurementthatarearbitrary.Theconceptofutilityhelpsusmakepredictionsaboutconsumptionchoicesinmuchthesamewaythattheconceptoftemperatureenablesustopredictwhenwaterwillturntoiceorsteam.Theconceptofutilityhelpsusunderstandwhypeoplebuymoreofagoodwhenitspricefallsandwhypeoplebuymoreofmostgoodswhentheirincomesincreases.PredictionsofMarginalUtilityTheoryTemperature:AnAnalogyPredictBehavioralEconomicsBehavioraleconomicsstudiesthewaysinwhichlimitsonthehumanbrain’sabilitytocomputeandimplementrationaldecisionsinfluenceseconomicbehavior—boththedecisionsthatpeoplemakeandtheconsequencesofthosedecisionsforthewaymarketswork.Therearethreeimpedimentstorationalchoice:BoundedrationalityBoundedwill-powerBoundedself-interestNewWaysofExplainingConsumerChoicesBehavioralEconomicsNewWaysoBoundedRationalityBoundedrationalityisrationalitythatisboundedbythecomputingpowerofthehumanbrain.Facedwithuncertainty,consumerscannotrationallymakechoicesandinsteadrelyonotherdecision-makingmethodssuchasrulesofthumb,listeningtotheviewsofothers,orgutinstinct.NewWaysofExplainingConsumerChoicesBoundedRationalityNewWaysofBoundedWill-PowerBoundedwill-poweristheless-than-perfectwill-powerthatpreventsusfrommakingadecisionthatweknow,atthetimeofimplementingthedecision,wewilllaterregret.BoundedSelf-InterestBoundedself-interestisthelimitedself-interestthatsometimesresultsinsuppressingourownintereststohelpothers.Mainapplicationsareinfinancewhereuncertaintyisthekeyfactorandsavingswherefutureisthekeyfactor.NewWaysofExplainingConsumerChoicesBoundedWill-PowerNewWaysofOnbehaviorobservedbybehavioraleconomistsismoregeneralandmightaffectyourchoices.TheEndowmentEffectTheendowmenteffectisthetendencyforpeopletovaluesomethingmorehighlysimplybecausetheyownit.NewWaysofExplainingConsumerChoicesOnbehaviorobservedbybehaviNeuroeconomicsNeuroeconomics

isthestudyoftheactivityofthehumanbrainwhenapersonmakesaneconomicdecision.Differentdecisionsappeartoactivatedifferentareasofthebrain.SomedecisionsaremadeInthepre-frontalcortexwherememoriesarestoredanddataanalyzedandmightbedeemedrational.Inthehippocampuswherememoriesofanxietyandfeararestoredandmightbedeemedirrational.NewWaysofExplainingConsumerChoicesNeuroeconomicsNewWaysofExplControversyShouldeconomicsfocusonexplainingthedecisionsweobserveorshoulditfocusonwhatgoesoninsidepeople’sheads?Thisisthecontroversy.Formosteconomists,thegoalofeconomicsistoexplainthedecisionsthatweobservepeoplemake,andnottoexplainwhatgoesoninsidepeople’sheads.NewWaysofExplainingConsumerChoicesControversyNewWaysofExplainCHAPTER1CHAPTER1帕金经济学第9版课件Ch089electureYouwantColdplay’slatesthitalbum,VivalaVida,andyouwanttheJustinTimberlakeandMadonnasingle,FourMinutes.Willyoudownloadthealbumandthesingle?OrwillyoubuytwoCDs?OrwillyoubuythealbumonaCDanddownloadthesingle?Whatdeterminesourchoicesasbuyersofrecordedmusic?Youknowthatdiamondsareexpensiveandwaterischeap.Doesn’tthatseemodd?Whydoweplaceahighervalueonuselessdiamondsthanonessential-to-lifewater?YouwantColdplay’slatesthitPreferencesAhousehold’spreferencesdeterminethebenefitsorsatisfactionapersonreceivesconsumingagoodorservice.Thebenefitorsatisfactionfromconsumingagoodorserviceiscalledutility.TotalUtilityTotalutilityisthetotalbenefitapersongetsfromtheconsumptionofgoods.Generally,moreconsumptiongivesmoreutility.MaximizingUtilityPreferencesMaximizingUtilityTable8.1providesanexampleoftotalutilityschedule.Totalutilityfromagoodincreasesasthequantityofthegoodincreases.Forexample,asthenumberofmoviesseeninamonthincreases,totalutilityfrommoviesincreases.MaximizingUtilityTable8.1providesanexample帕金经济学第9版课件Ch089electureMarginalUtilityMarginalutilityisthechangeintotalutilitythatresultsfromaone-unitincreaseinthequantityofagoodconsumed.Asthequantityconsumedofagoodincreases,themarginalutilityfromconsumingitdecreases.Wecallthisdecreaseinmarginalutilityasthequantityofthegoodconsumedincreasestheprincipleofdiminishingmarginalutility.MaximizingUtilityMarginalUtilityMaximizingUtiTable8.1providesanexampleofmarginalutilityschedule.Marginalutilityfromagooddecreasesasthequantityofthegoodincreases.Forexample,asthenumberofmoviesseeninamonthincreases,marginalutilityfrommoviesdecreases.MaximizingUtilityTable8.1providesanexampleFigure8.1(a)showsatotalutilitycurveforsoda.Totalutilityincreaseswiththeconsumptionofasodaincreases.MaximizingUtilityFigure8.1(a)showsatotalut帕金经济学第9版课件Ch089electureFigure8.1(b)illustratesdiminishingmarginalutility.Asthequantityofsodaincreases,themarginalutilityfromsodadiminishes.MaximizingUtilityFigure8.1(b)illustratesdimi帕金经济学第9版课件Ch089electureThekeyassumptionofmarginalutilitytheoryisthatthehouseholdchoosestheconsumptionpossibilitythatmaximizestotalutility.TheUtility-MaximizingChoiceWecanfindtheutility-maximizingchoicebylookingatthetotalutilitythatarisesfromeachaffordablecombination.Theutility-maximizingcombinationiscalledaconsumerequilibrium.MaximizingUtilityThekeyassumptionofmarginalTable8.2showsLisa’sutility-maximizingchoice.Lisahas$40amonthtospendonmoviesandsoda.Thepriceofamovieis$8andthepriceofsodais$4acase.EachrowofthetableshowsacombinationofmoviesandsodathatexhaustsLisa’s$40.MaximizingUtilityTable8.2showsLisa’sutility帕金经济学第9版课件Ch089electureLisachoosesthecombinationthatgivesherthehighesttotalutility.Lisamaximizeshertotalutilitywhenshesees

2moviesanddrinks6casesofsodaamonth.Lisagets90unitsofutilityfromthe2moviesand225unitsofutilityfromthe6casesofsoda.MaximizingUtilityLisachoosesthecombinationtChoosingattheMarginAconsumer’stotalutilityismaximizedbyfollowingtherule:

Spendallavailableincome.

Equalizethemarginalutilityperdollarforallgoods.Themarginalutilityperdollaristhemarginalutilityfromagooddividedbyitsprice.MaximizingUtilityChoosingattheMarginMaximiziTheUtility-MaximizingRule:CallthemarginalutilityofmoviesMUM.CallthemarginalutilityofsodaMUS.CallthepriceofmoviesPM.CallthepriceofsodaPS.ThemarginalutilityperdollarfromseeingmoviesisMUM/PM.ThemarginalutilityperdollarfromsodaisMUS/PS.MaximizingUtilityTheUtility-MaximizingRule:MTotalutilityismaximizedwhen:MUM/PM=MUS/PSTable8.3showswhytheutility-maximizingruleworks.Thecombinationiseachrowisaffordable(costs$40).InrowC,MUM/PM=MUS/PS=5.

MaximizingUtilityTotalutilityismaximizedwhe帕金经济学第9版课件Ch089electureIfMUM/PM>MUS/PS,

thenspendlessonsodaandmoreonmovies.MUMdecreasesandMUSincreases.Onlywhen

MUM/PM=MUS/PS,

isitnotpossibletoreallocatethebudgetandincreasetotalutility.MaximizingUtilityIfMUM/PM>MUS/PS,MaximizingIfMUS/PS>MUM/PM,thenspendmoreonsodaandlessonmovies.MUSdecreasesandMUMincreases.Onlywhen

MUM/PM=MUS/PS,

isitnotpossibletoreallocatethebudgetandincreasetotalutility.MaximizingUtilityIfMUS/PS>MUM/PM,MaximizingAFallinthePriceofaMovieWhenthepriceofagoodfallsthequantitydemandedofthatgoodincreases—thedemandcurveslopesdownward.Forexample,ifthepriceofamoviefalls,weknowthatMUM/PMrises,sobeforetheconsumerchangesthequantitiesbought,MUM/PM>MUS/PS.

Torestoreconsumerequilibrium(maximumtotalutility)theconsumerincreasesthemoviesseentodrivedowntheMUM

andrestoreMUM/PM=MUS/PS.PredictionsofMarginalUtilityTheoryAFallinthePriceofaMovieAchangeinthepriceofonegoodchangesthedemandforanothergood.You’veseenthatifthepriceofamoviefalls,MUM/PMrises,sobeforetheconsumerchangesthequantitiesconsumed,MUM/PM>MUS/PS.

Torestoreconsumerequilibrium(maximumtotalutility)theconsumerdecreasesthequantityofsodaconsumedtodriveuptheMUS

andrestoreMUM/PM=MUS/PS.PredictionsofMarginalUtilityTheoryAchangeinthepriceofonegTable8.4showsLisa’saffordablecombinationswhenthepriceofamovieis$4.BeforeLisachangeswhatshebuys MUM/PM>MUS/PS.Tomaximizehertotalutility,Lisaseesmoremoviesanddrinkslesssoda.PredictionsofMarginalUtilityTheoryTable8.4showsLisa’safforda帕金经济学第9版课件Ch089electureFigure8.2illustratesthesepredictions.Afallinthepriceofamovieincreasesthequantityofmoviesdemanded—amovementalongthedemandcurveformovies,anddecreasesthedemandforsoda—ashiftofthedemandcurveforsoda.PredictionsFigure8.2illustratesthesep帕金经济学第9版课件Ch089electureARiseinthePriceofSodaNowsupposethepriceofsodarises.WeknowthatMUS/PSfalls,sobeforetheconsumerchangesthequantitiesbought,MUS/PS<MUM/PM.

Torestoreconsumerequilibrium(maximumtotalutility)theconsumerdecreasesthequantityofsodaconsumedtodriveuptheMUS

andincreasesthequantityofmoviesseentodrivedownMUM.

ThesechangesrestoreMUM/PM=MUS/PS.PredictionsofMarginalUtilityTheoryARiseinthePriceofSodaPreTable8.5showsLisa’saffordablecombinationswhenthepriceofsodais$8acaseandamovieisis$4.BeforeLisachangeswhatshebuys MUM/PM<MUS/PS.Tomaximizehertotalutility,Lisadrinkslesssoda.PredictionsofMarginalUtilityTheoryTable8.5showsLisa’safforda帕金经济学第9版课件Ch089electureFigure8.3illustratesthesepredictions.Ariseinthepriceofsodadecreasesthequantityofsodademanded—amovementalongthedemandcurveforsoda.PredictionsofMarginalUtilityTheoryFigure8.3illustratesthesep帕金经济学第9版课件Ch089electureARiseinIncomeWhenincomeincreases,thedemandforanormalgoodincreases.Giventhepricesofmoviesandsoda,whenLisa’sincomeincreasesfrom$40amonthto$56amonth,shebuysmoremoviesandmoresoda.Moviesandsodaarenormalgoods.Table8.6showsthesepredictions.PredictionsofMarginalUtilityTheoryARiseinIncomePredictionsofTable8.6showsLisa’saffordablecombinationswhenshehas$56tospend.With$40tospend,Lisasees6moviesanddrinks

4casesofsodaamonth.With$56tospend,Lisaspendstheextra$16.Shesees8moviesanddrinks6casesofsodaamonth.PredictionsofMarginalUtilityTheoryTable8.6showsLisa’safforda帕金经济学第9版课件Ch089electureFigure8.4illustratesthesepredictions.PredictionsofMarginalUtilityTheoryFigure8.4illustratesthesep帕金经济学第9版课件Ch089electure帕金经济学第9版课件Ch089electureTheParadoxofValueTheparadoxofvalue“Whyiswater,whichisessentialtolife,farcheaperthandiamonds,whicharenotessential?〞isresolvedbydistinguishingbetweentotalutilityandmarginalutility.Weusesomuchwaterthatthemarginalutilityfromwaterconsumedissmall,butthetotalutilityislarge.Webuyfewdiamonds,sothemarginalutilityfromdiamondsislarge,butthetotalutilityissmall.PredictionsofMarginalUtilityTheoryTheParadoxofValuePredictionForwater,thepriceislow,totalutilityislarge,andmarginalutilityissmall.Fordiamonds,thepriceishigh,totalutilityissmall,andmarginalutilityishigh.Butmarginalutilityperdollaristhesameforwateranddiamonds.PredictionsForwater,thepriceislow,tValueandConsumerSurplusThesupplyofwaterisperfectlyelastic,sothequantityofwaterconsumedislargeandtheconsumersurplusfromwaterislarge.Incontrast,thesupplyofdiamondsinperfectlyinelastic,sothepriceishighandtheconsumersurplusfromdiamondsissmall.PredictionsValueandConsumerSurplusPred帕金经济学第9版课件Ch089electureTemperature:AnAnalogyUtilityissimilartotemperature.Bothareabstractconcepts,andbothhaveunitsofmeasurementthatarearbitrary.Theconceptofutilityhelpsusmakepredictionsaboutconsumptionchoicesinmuchthesamewaythattheconceptoftemperatureenablesustopredictwhenwaterwillturntoiceorsteam.Theconceptofutilityhelpsusunderstandwhypeoplebuymoreofagoodwhenitspricefallsandwhypeoplebuymoreofmostgoodswhentheirincomesincreases.PredictionsofMarginalUtilityTheoryTemperat