复旦大学本科微观经济学lecture02.ppt

Key issues demand supply market equilibrium shocking the equilibrium effects of government interventions when to use supply and demand model Supply and demand model most widely-used economic model testable (like all good theories) describes how consumers and suppliers interact in a market to determine quantity of a good sold and its price To use supply and demand model you need to determine buyers behavior sellers behavior how they interact know whether the model is: applicable to the market under examination Quantity demanded is the amount of a good or service that consumers want to buy at a given price, holding constant other factors that affect demand What determines demand? tastes price of this good prices of other goods income information (cholesterol) government actions other factors: nicotine, ... Demand curve shows quantity demanded—largest quantity that consumers are willing to buy—at each price, holding constant other factors that affect purchases note: quantity demanded of a good or service can exceed quantity sold (or vice versa) strange demand curve convention: price is on the vertical axis Effect of price changes movement along the demand curve demand curve is a concise summary of the answer to the question: what happens to the quantity demanded as the price changes, holding all other factors constant? Law of demand demand curves slope down ? a drop in price results in an increase in quantity demanded (holding other factors constant) one of the most important empirical finding in economics Demand effects of other factors change in any factor other than the price of the good causes a shift of the demand curve (not a movement along the demand curve) this shift of the demand curve is a trick to avoid drawing 3D diagrams Effect on pork demand of a rise in price of beef beef is a substitute for pork at a given price of pork, a rise in the price of beef causes some people to switch from beef to pork Summary change in the price of a good cau