杰弗里·佩洛夫中级微观PPT第四章.pptx

Chapter 4DemandI have enough money to last me the rest of my life, unless I buy something.Jackie MasonChapter 4 OutlineChallenge: Paying Employees to Relocate4.1 Deriving Demand Curves4.2 Effects of an Increase in Income4.3 Effects of a Price Increase4.4 Cost-of-Living Adjustment4.5 Revealed Preference Challenge SolutionChallenge: Paying Employees to RelocateBackground:International firms are increasingly relocating workers throughout their home countries and internationally. Firms must decide how much compensation to offer workers to move.Question:Do firms’ standard compensation packages overcompensate workers by paying them more than necessary to include them to move to a new location? 4.1 Deriving Demand CurvesIf we hold people’s tastes, their incomes, and the prices of other goods constant, a change in the price of a good will cause a movement along the demand curve.We saw this in Chapter 2:4.1 Deriving Demand CurvesIn Chapter 3, we used calculus to maximize consumer utility subject to a budget constraint.This amounts to solving for the consumer’s system of demand functions for the goods.Example: q1 = pizza and q2 = burritosDemand functions express these quantities in terms of the prices of both goods and income:Given a specific utility function, we can find closed-form solutions for the demand functions.4.1 Example: Deriving Demand CurvesConstant Elasticity of Substitution (CES) utility function:Budget constraint:Y= p1q1 + p2q2In Chapter 3, we learned that the demand functions that result from this constrained optimization problem are:Quantity demanded of each good is a function of the prices of both goods and income.4.1 Example: Deriving Demand CurvesCobb-Douglas utility function: Budget constraint:Y= p1q1 + p2q2In Chapter 3, we learned that the demand functions that result from this constrained optimization problem are:With Cobb-Douglas, quantity demanded of each good is a function of only the good’s own-price and income.4.1 Demand Functions for Five U