微观经济学 Ch01.ppt

Chapter 1 The Market --- Appreciating Economic Modeling The Purpose of this Chapter To begin to understand the art of building an economic model To begin to understand three basic elements of modeling in economics: Purpose Simplification through assumptions Value judgment The Purpose of an Economic Model The purpose of an economic model is to help provide precise insights (精确的洞察力）on a specific economic phenomenon. Thus: Different phenomena needs different model; Simplification by assumption is necessary An Illustration: Modeling the Apartment Market Purpose: How are apartment rents determined? Are rents “desirable”? Simplifying assumptions: apartments are close or distant, but otherwise identical distant apartments rents are exogenous (外生变量） and known many potential renters and landlords Two Very Common Modeling Assumptions Rational Choice （理性选择）: Each person tries to choose the best alternative available to him or her. Equilibrium （均衡）: economic agents interact with each other, resulting in an equilibrium, in which each person reaches an optimal decision given others’ decisions. Modeling Apartment Demand Demand: Suppose the most any one person is willing to pay to rent a close apartment is $500/month. Then p = $500 ? QD = 1. Suppose the price has to drop to $490 before a 2nd person would rent. Then p = $490 ? QD = 2. Modeling Apartment Demand The lower is the rental rate p, the larger is the quantity of close apartments demanded p ? ? QD ?. The quantity demanded vs. price graph is the market demand curve for close apartments. Market Demand Curve for Apartments Modeling Apartment Supply Supply: It takes time to build more close apartments so in this short-run the quantity available is fixed (at say 100). Market Supply Curve for Apartments Competitive Market Equilibrium(竞争性市场均衡） Quantity demanded = quantity available ? price will neither rise nor fall so the market is at a competitive equilibrium. Competitive Market Equilibrium Comparative Stat