上财微观经济学经典讲义上.pdf

Welcome to Intermediate Microeconomics Instructor: Liguo LIN School of Economics, SHUFE Introduction Intermediate Microeconomics: A Modern Approach Hal R. Varian, University of California, • 2002 Chapter One The Market The Theory of Economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine, an apparatus of the mind, a technique of thinking which helps its possessor to draw correct conclusions John Maynard Keynes Economic Modeling What causes what in economic systems? At what level of detail shall we model an economic phenomenon? Which variables are determined outside the model (exogenous) and which are to be determined by the model (endogenous)? Modeling the Apartment Market How are apartment rents determined? Suppose apartments are close or distant, but otherwise identical distant apartments rents are exogenous and known many potential renters and landlords Modeling the Apartment Market Who will rent close apartments? At what price? Will the allocation of apartments be desirable in any sense? How can we construct an insightful model to answer these questions? Economic Modeling Assumptions Two basic postulates: Rational Choice: Each person tries to choose the best alternative available to him or her.(optimum) Equilibrium: Market price adjusts until quantity demanded equals quantity supplied. 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 $