微观经济学20100915.pptVIP

Main contents The basic concepts and problems Scarcity: Opportunity cost What and for whom to produce? How many/much to produce? How to produce? Chapter2:DEMAND AND SUPPLY - to explain what demand and supply are and how they determine price and the quantity sold in the market. - when there is free exchange, prices will allocate scarce goods and services. DEMAND concept: - individual’s demand schedule is a list of prices and corresponding quantities that an individual is willing and able to buy in some period, other things remaining constant. Quantity demanded per time period varies inversely with price(the law of demand). -the market demand schedule is the sum of quantities that all individual consumers in the market demand at each price. In the market, quantity demanded varies inversely with price. DEMAND market demand schedule and functions: FACTORS INFLUENCING DEMAND other things influencing quantity demanded but being constant when deriving demand curve: - a consumer’s income: for normal/inferior commodities, an increase in a consumer’s income leads to more/less quantity demanded. - the prices of other goods a consumer will demand more/less for the good in discussion when the price of a substitution/complement good increases. -changes in consumer’s taste -people’s expectation SHIFTS IN DEMAND changes in demand When price falls/rises,other things remaining the same,quantity demanded rises/falls. When something held constant in deriving the demand curve changes, demand increases or decreases. An increase/a decrease in demand indicates that consumers are willing and able to buy more/less at each price on the schedule. Exercise Suppose: D(p)=100-0.5p, please derive of the demand curve and write the inverse demand function. Suppose that the price of train ticket rises 10%, what will happen to the demand for road transportation? Use demand curve shifts to illustrate the effect of the following events on the market for apples: (1)scienti