微观经济学 ECON103.ppt

FIC ECON103 PRINCIPLES OF MICROECONOMICS LECTURE 1 Aplia / What Where FIC Portal: Syllabus Course announcements Lecture notes Aplia: Syllabus Textbook Home assignments A sample email Hello Vera, ... the reason you are writing goes here... Sincerely, Your name The time structure of a class 8:30 – 10:30 am Lecture (9:20 – 9:30 10-min break) 10:30 – 11:00 am Break 11:00 am – 12:30 pm  Tutorial (11:50 – 12:00 10-min break) Scarcity Why is scarcity important? Maximization People maximize their well-being (called utility) Firms maximize profits Nations maximize their well-being (called social welfare) Governments maximize - what? Substitution Substitution Substitution Substitution A bit about markets A bit about markets A bit of math “Willingness” and “ability” are not the same: Ability to pay literally means you have enough income to make the payment * But just because someone is able to pay for something does not mean s/he will be willing to. Example: suppose you don’t drink coffee. You are able to buy a coffee, but you are not willing to. * By contrast, willingness to pay does not exist without ability to pay. If you are willing to pay for something, then you must be able to afford it * A possible objection to the principle of substitution: “No matter what the pay is, I’ll never give up my life!” There are dozens of ways to risk your life and/ or shorten your life This is a typical trade-off of now vs. later * Social trade-offs: People may hurt others by their choices →  your best private decision could not be the same as the best social decision Society usually limits everyone’s ability to freely choose what and how much to trade →  laws and penalties (traffic laws, family laws etc.) Marginal values exist because people are willing to substitute one good for another → Marginal value is the measure of value for goods Marginal value is the maximum amount of one good an individual is