微观经济学5

Chapter 4----demand and consumer behaviorAs we balance competing demands and desires, we make the choices that define our lives. These choices determine/underlie the demand curves and price elasticities that we met in the earlier chapters. It is the task of this chapter to explore the basic principles of consumer choice and behavior.In this chapter we will1)see how patterns of market demand can be explained by the process ofindividual’s pursuit of their preferred bundle of consumption goods;2)Learn how to measure the benefits that each of us receives from participating ina market economy.PART A choice and utility theory选择和效用理论Utility:1)It’s a basic assumption, or construct that economists make to understand orexplore consumer behavior.2)It denotes satisfaction.3)It refers to how consumers rank different goods and services.In the theory of demand, we assume that people maximize their utility, which means that they choose the bundle of consumption goods that they most prefer.边际效用：指在一定时间内消费者增加一个单位商品或服务所带来的新增效用，也就是总效用的增量。

效用：在经济学中，是指商品满足人的欲望的能力，或者说，效用是指消费者在消费商品时所感受到的满足程度。

Section A Marginal utility and the law of diminishing marginal utility边际效用递减率The increment to your utility is called marginal utility.The law of diminishing utility: the amount of extra or marginal utility declines as a person consumes more and more of a good.当享受的财货或劳务增加时，但效用增加的程度却赶不上财货或劳务的增加速度。

1)the amount of goods consumed increases;2)total utility increases in this case, but3)total utility grows at a slower and slower rate;4)That is to say, your marginal utility diminishes as more of a good is consumed.Section B Graphic Description of utility—FIND AS MUCH AS POSSOBILE FROM TABLES AND GRAPHS5) the total utility of consuming a certain amount is equal to the sum of the marginal utilities up to that point.TABLE-COVERTED GRAPHTotal utility in a rises with consumption, but it rises at a decreasing rate, showing diminishing marginal utility. This observation led early economists to formulate the law of downward sloping demand.Part B--- Derivation来历of demand curvesSection A the equi-marginal principleThe purpose is to explain consumer demand and to understand the nature of demand curves.Assume that each consumer maximizes utility, which means that the consumer chooses the most preferred bundle of goods from what is available. Also assume that consumers have a certain income and face given market prices for goods.Then what’s the sensible rule for choosing preference bundle of goods?I would not expect that the last egg brings the same marginal utility as the last pairs of shoes, because shoes cost much more per unit than eggs.A satisfactory answer would be: if good A costs twice as much as good B, then buy good A only when its marginal utility is at least twi ce as great as good B’s marginalutility.This leads to the equi-marginal principle that I should arrange my consumption so that the last dollar spent on each good is bringing me the same marginal utility. Equi-marginal principle: the fundamental condition of maximum satisfaction or utility is the equi-marginal principle. It states that a consumer will achieve maximum satisfaction or utility when the marginal utility of the last dollar spent on a good is exactly the same as the marginal utility of the last dollar spent on any other good.等边际原理：效用最大化的基本条件是符合等边际原理，即在消费者的收入固定和他面临着各种物品的市场价格既定的条件下，当花费在任何一种物品上的最后一美元所得到的边际效用正好等于花费在其他任何一种物品上的最后一美元所得到的边际效用的时候，该消费者就得到最大的满足或效用。

Why must this principle hold?If any one good gave more marginal utility per dollar, I would increase my utility by taking more money away from other goods and spending more on that good—until the law of diminishing marginal utility drove its marginal utility per dollar down to equality with that of other goods.If any good gave less marginal utility per dollar than the common level, I would buy less of it until the marginal utility of the last dollar spent on it had risen back to the common level.The common marginal utility per dollar of all commodities in consumer equilibrium is called the marginal utility of income. It measures the additional utility额外的效用that would be gained if the consumer could enjoy an extra dollar’s worth of consumption.This fundamental condition of consumer equilibrium can be written in terms of the marginal utilities (Mus) and prices (P) of the different goods in the following compact way:Section B why demand curves slope downwardSection B why demand curves slope downwardUsing the fundamental rule for consumer behavior, we can see why demand curves slope downward. For simplicity, hold the common marginal utility per dollar of income constant. Then increase the price of good 1. With no change in quantity consumed, the first marginal utility will be below the mu per dollar of all other goods. The consumer will have to readjust the consumption of good 1. the consumer will do this by 1) lowering the consumption of good 1, thereby raising the mu of good 1, until at the new, reduced level of consumption of good 1, the new marginal utility spent on good 1 is again equal to the mu per dollar spent on other goods.A higher price for a good reduces the consumer’s desired consumption of that commodity; this shows why demand curves slope downward.Section C why demand curves slope downward—another approach—substitution effect and income effectSubstitution effect: when the price of a good rises, consumer tends to buy more ofthe same type but less expensive goods for consumption. This may explain why higher price always means lower demand.Income effect: higher price with constant money income means lower real income. Lower income means lower ability and desire to consume. This may again lead to lower demand.Quantification of income effect量化的收入效应: income elasticity收入弹性.This term denotes the percentage change in quantity demanded divided by the percentage change in income, holding other things, such as prices, constant.Four variables are needed.●Original demand,●New demand,●Original income●New income.High income elasticities, such as those for airline travel or yachts 游艇indicate that the demand for these goods rise rapidly as income increases. Low income elasticities such as for potatoes or used furniture denote a weak response of demand to increases in income.Income and substitution effects combine to determine the major characteristics of demand curves of different commodities. Under some circumstances the resulting demand curve is very price elastic, as where consumer has been spending a great deal on the commodities and ready substitutes are available. In this case both the income and the substitution effects are strong and the quantity demanded responds strongly to a price increase.But consider a commodity like salt, which requires only a small fraction of the consumer’s budget. Salt is not easily replaceable by other items and is needed in small amounts to complement more important items. For salt, both income and substitution effects are small, and demand will tend to be price-inelastic.Part C from Individual to market demandThe idea is to move from individual demand to total market demand. The demand curve for a good for the entire market is obtained by summing up the quantities demanded by all the consumers.To obtain the total market demand, we calculate the sum total of what all the different consumers consume at each price. We then plot that total amount as a point on the market demand curve.The market demand curve is the sum of individual demands at each price. The above figures show how to add individual demand curves horizontally to get the market demand curve.Section A: DEMAND SHIFTS1 、Increase in income may increase the amount we are willing to buy of most goods. Necessities may be less responsive to income rise, but luxuries may respond more to income increase.2、some goods may be regarded as anomalies异常because they may be less desired when income is up, such as used furniture.Section B: substitutes and complements替代品和补充品1、If rise of price of good A increases the demand for good B, then we say good B and good A are substitutes.2、If rise of price of good A does not affect the demand for good B, then we say good A and B are independents.3、If more sale of good A means more sales of good B, then we say good A and goodB are complement.Part D: THE PARADOX OF VALUE价值悖论1 、paradox: nothing is more useful than water, but it will scarce purchase anything.A diamond, on the contrary, has scarce any value in use; but a very great quantity of other goods may frequently be had in exchange for it.2 、solution: the more there is of a commodity, the less there is the relative desirability of its last little unit. It is therefore clear why water has a low price and why an absolute necessity like air becomes a free good. In both cases, it is the large quantities that pull the marginal utilities so far down and thus reduce the prices of these vital commodities.Part E: consumer surplusThe paradox of value indicates a contradiction矛盾:On the one hand, the monetary value货币值of air is zero, but on the other hand, air’s contribution to our welfare is so tremendous.The gap between the total utility of a good and its total market value is called consumer surplus.消费者剩余是指消费者为取得一种商品所愿意支付的价格与他取得该商品而支付的实际价格之间的差额。