Microeconomics Week 7 Chapter 8 微观经济 教学课件.pptVIP

* * * If utility is arbitrary, what use is it? The concept of utility is abstract, but the implications of utility analysis are concrete. Help the students be less concerned about the abstract nature of measuring utility by emphasizing that it is enough to be able to carefully analyze one consumer’s consumption decisions and extrapolate what this behavior could imply for market behavior in general. Appeal to those concepts that students already understand from earlier chapters by linking the abstract concept of utility with concrete implications of consumer behavior. For example, utility-maximization rules explain the law of demand and shifts in demand, as seen in chapter 3. * * * * * * * * * * * * * * Marginal decision making is the core of the economic way of thinking. Get your students to appreciate that, aside from the concept of opportunity cost, marginal reasoning is the most important tool for understanding the economic perspective. Remind them that we have been using marginal reasoning for many chapters now: In Chapter 2 we derived the marginal cost of production from the PPF. In Chapter 5 we discovered that competitive equilibrium is efficient because marginal benefit on the demand curve equals marginal cost on the supply curve. In this chapter, we discover that equalizing the marginal utility per dollar across all goods and services maximizes a consumer’s utility. * People don’t calculate and compare marginal utilities and prices. One of the challenges in teaching the marginal utility theory is getting the students to appreciate the fundamental role of a model of choice. The goal is to predict choices, not to describe the thought processes that make them. The physics model of the pool player’s choices (This Instructor’s Manual, Chapter 1) is relevant here. Gary Becker told the story a bit differently and more pointedly for present purposes. Here’s what he said (Parkin, Economics, first edition, 1990, p. 154): Cliff Lee [or substitute a currently hot p