中级微观经济学讲义1.pdf

Microeconomic Theory Basic Principles and Extensions, 9e By WALTER NICHOLSON Slides prepared by Linda Ghent (Eastern Illinois University) Modified by Huihua NIE (Renmin Unversity of China) www.ChinaES. 1 Chapter 1 ECONOMIC MODELS www.ChinaES. 2 Theoretical Models • Economists use models to describe economic activities, as a map for road • While all economic models are abstractions from reality, they provide aid in understanding behavior of individuals, firms and governments www.ChinaES. 3 Verification of Economic Models • There are two general methods used to verify economic models: – direct approach • establishes the validity of the model’s assumptions – indirect approach • shows that the model correctly predicts real- world events www.ChinaES. 4 Verification of Economic Models • We can use the profit-maximization model to examine these approaches – do firms really seek to maximize profits? Yes and No by questionnaires. – can the model predict the behavior of real-world firms? An example of printer. Empirical analysis matters! – what firms can survive in competitive market? www.ChinaES. 5 Features of Economic Models • Ceteris Paribus assumption • Optimization assumption • Distinction between positive and normative analysis www.ChinaES. 6 Ceteri