IntermediateMicroeconomics.pptVIP

Intermediate Microeconomics -------------Introduction Part 1 MICROECONOMICS AND MACROECONOMICS Microeconomics The study of how households and firms make decisions and how they interact in markets Macroeconomics the study of the economy as a whole and economy-wide phenomena, including inflation, unemployment, and economic growth Part 2 Describing the relationship(1) Economic models Two key variables: Endogenous variable: Endogenous variables are those variables that a model tries to explain. Exogenous variable: Exogenous variables are those variables that a model takes as given. Part 2 Describing the relationship(1) Economic models Objective: 1)Show the key relationship among endogenous variables and the exogenous variables that are given. 2)Comparative statics: show how changes in the exogenous variables affecting the endogenous variables Part 2 Describing the relationship(1) Economic models Assumptions——the start of our analysis. A multitude of models：Whether the underlying assumptions are reasonable for the problems facing to us。 Two implicit and important assumptions throughout microeconomic and macroeconomics Part 2 Describing the relationship(1) Economic models 1)Economic actors are fully rational.——Optimization principle Households and firms do the best they can for themselves, given their objectives and the constraints they face. Part 2 Describing the relationship(1) Economic models 2)The resources are scarce. Scarcity means that the economy has limited resources and therefore cannot produce all the goods and services that people desire. Economics is the study of how society locating its scarce resources. Part 2 Describing the relationship(2)Function Demand function Utility function Supply function Cost function …… Part 3 How this semesterproceeds 1 . Consumer theory: The consumers will choose the best bundles they can afford.( i,e. The consumers will maximize their utility under the budget constraints coming to them.) Part 3 How this sem