微观经济模型.pdfVIP

ECONOMIC MODELS Chapter 1 1 Pusan National University Theoretical Models } Economists use models to describe economic activities } While most economic models are abstractions from reality, they provide aid in understanding economic behavior 2 Pusan National University 1 Verification of Economic Models } There are two general methods used to verify economic models: } direct approach } establishes the validity of the model’s assumptions } indirect approach } shows that the model correctly predicts real-world events 3 Pusan National University Verification of Economic Models } We can use the profit-maximization model to examine these approaches } is the basic assumption valid? do firms really seek to maximize profits? } can the model predict the behavior of real-world firms? 4 Pusan National University 2 Features of Economic Models } Ceteris Paribus assumption } Optimization assumption } Distinction between positive and normative analysis 5 Pusan National University Ceteris Paribus Assumption } Ceteris Paribus means “other things the same” } Economic models attempt to explain simple relationships } focus on the effects of only a few forces at a time } other variables are assumed to be unchanged during the period of study 6 Pusan National University 3 Optimization Assumptions } Many economic models begin with the assumptio