nicholson微观经济理论（答案+PPT+习题库）-ch12.ppt

Chapter 12 GENERAL EQUILIBRIUM AND WELFARE Perfectly CompetitivePrice System We will assume that all markets are perfectly competitive there is some large number of homogeneous goods in the economy both consumption goods and factors of production each good has an equilibrium price there are no transaction or transportation costs individuals and firms have perfect information Law of One Price A homogeneous good trades at the same price no matter who buys it or who sells it if one good traded at two different prices, demanders would rush to buy the good where it was cheaper and firms would try to sell their output where the price was higher these actions would tend to equalize the price of the good Assumptions of Perfect Competition There are a large number of people buying any one good each person takes all prices as given and seeks to maximize utility given his budget constraint There are a large number of firms producing each good each firm takes all prices as given and attempts to maximize profits General Equilibrium Assume that there are only two goods, x and y All individuals are assumed to have identical preferences represented by an indifference map The production possibility curve can be used to show how outputs and inputs are related Edgeworth Box Diagram Construction of the production possibility curve for x and y starts with the assumption that the amounts of k and l are fixed An Edgeworth box shows every possible way the existing k and l might be used to produce x and y any point in the box represents a fully employed allocation of the available resources to x and y Edgeworth Box Diagram Edgeworth Box Diagram Many of the allocations in the Edgeworth box are technically inefficient it is possible to produce more x and more y by shifting capital and labor around We will assume that competitive markets will not exhibit inefficient input choices We want to find the efficient allocations they illustrate the actual production outcomes Edgeworth Box Diagram We