7第二十一章消费者选择理论研讨.ppt

* The two-good assumption greatly simplifies the analysis without altering the basic insights about consumer choice. If your students remember the Production Possibilities Frontier, you might tell them that a budget constraint is, in essence, a “consumption possibilities frontier” for the consumer: it shows all combinations (bundles) of the two goods that the consumer can afford to buy. A very straightforward exercise. Another straightforward problem that will not take much class time. Yet, students will learn these concepts better by figuring out for themselves how the budget line moves in response to income and price changes. Hurley has more fish at B than at A, so an extra fish would be less valuable at B than at A. At A, Hurley has few fish, so an additional fish is very valuable to him. At B, Hurley already has lots of fish, so an additional one is not as valuable to him. * It is hard to think of examples of perfect substitutes. (Even nickels and dimes are probably not perfect substitutes: I’d rather carry 10 dimes in my pocket than 20 nickels.) But it’s easy to think of examples that are close substitutes, and therefore are likely to have indifference curves that are not very bowed: 1) Movies (at the movie theater) and videos at home. A consumer might be willing to trade two videos for one night at the movies. 2) Coke and Pepsi (for consumers that do not perceive much difference between them). 3) Vacations in Hawaii and vacations in the Bahamas * Again, It is hard to think of examples of perfect complements. But it’s easy to think of examples that are good though not perfect complements, and therefore are likely to have indifference curves that are very bowed: 1) Tickets to rock concerts and parking at the arena in which the concert takes place 2) Hot dogs and hot-dog buns 3) Brewed Starbucks coffee and 20 spoons of sugar (If you don’t get this one, you probably haven’t tried brewed Starbucks coffee!) When the two goods are