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1、上财中微Chapter1Stillwatersrundeep.流静水深流静水深,人静心深人静心深Wherethereislife,thereishope。有生命必有希望。有生命必有希望Instructorn陆桔利nOffice: 经济学院 720nEmail: nOffice Hours: Thursday 14:00-16:00 Teaching Assistantn程洪伟nOffice: 经济学院 216nEmail: nOffice Hours: Tuesday 18:30-20:30教材教材n“Intermediate Microeconomics: A Modern Approa
2、ch” by Hal Varian, eighth edition, W.W.Norton & Co., 2009.n中译本:微观经济学：现代观点微观经济学：现代观点，范里安著，费方域等译，上海三联书店，上海人民出版社，2011.参考书目参考书目n1.曼昆，2009：经济学原理：微观经济学分册（第五版），清华大学出版社。n2. Robert S. Pindyck, Daniel L. Rubinfeld, Microeconomics, Six Edition, Tsinghua University Press, 2005 成绩n课堂提问及考勤课堂提问及考勤 5 %n课后作业课后作业 20%
3、n期中考试期中考试 20%n期末考试期末考试 55% Chapter OneThe MarketMain points for chapter 1n1.1 Economic modelingn1.2. Example: Modeling the apartment marketq1.2.1 Competitive market equilibriumq1.2.2 Comparative staticsq1.2.3 Imperfectly Competitive Markets na monopolistic landlordna perfectly discriminatory monopol
4、istic landlordna competitive market subject to rent control.q1.2.4. Which market outcomes are desirable (Pareto efficient)?1.1. Economic ModelingnWhat causes what in economic systems?qWhich variables are determined outside the model (exogenous variables)?qWhich variables are to be determined by the
5、model (endogenous variables)?nAt what level of detail shall we model an economic phenomenon?The Need for AbstractionnAbstraction - ignoring many details in order to focus on the most important elements of the problemnThe proper degree of abstraction depends on the objective of the analysisTwo Princi
6、ples in EconomicsnOptimizationnEquilibrium1.2. Example: Modeling the Apartment Marketn1.2.1 Competitive market equilibriumn1.2.2 Comparative staticsn1.2.3 Imperfectly competitive markets1.2.1 Competitive market equilibriumnCentral question: How are apartment rents determined?nAssumptions:qapartments
7、 are close or distant, but otherwise identicalqdistant apartments rents are exogenous and knownqmany potential renters and landlords, i.e., competitive marketMain Questionsn Who will rent close apartments?n At what price?Modeling Individual DemandnChoose either distant or close apartmentnDo you pref
8、er a close apartment? Why? nWhen do people tend to choose a close apartment? nDecision: What is the maximum rent you are willing to pay for a close apartment?Modeling Market DemandnDemand: Suppose the most a person is willing to pay for a close apartment is $500/month. Then p = $500 QD = 1.nSuppose
9、the price has to drop to $490 before a 2nd person would rent. Thenp = $490 QD = 2.nReservation price: maximum willingness to pay.Demand curvenDemand curve: a curve that relates the quantity demanded to price. nWhat is the relationship between the quantity demanded of a good and its price?Market Dema
10、nd Curve for close ApartmentspQDModeling Apartment SupplynSupply: It takes time to build more close apartments, therefore, the quantity available is fixed (say, at 100) in the short-run.Market Supply Curve for ApartmentspQS100Adjustment of the Market EquilibriumnIf the rental price is too low (ppe),
11、 what happens?Competitive Market EquilibriumnQuantity demanded = quantity supplied price will neither rise nor fallnso the market is at a competitive equilibrium.Competitive Market EquilibriumpQD,QSpe100People is willing to pay pe or more to get close apartments.Competitive Market EquilibriumnQ: Who
12、 rents the close apartments?nA: Those most willing to pay.nQ: Who rents the distant apartments?nA: Those least willing to pay.nSo the competitive market allocation is by “willingness-to-pay”.1.2.2 Comparative Statics (比较静态分析)nComparative Statics: comparing two static equilibria to analyze how the eq
13、uilibrium changes as an exogenous variable changes?Exogenous variables in this modelnWhat are the exogenous variables in this model?qprice of distant apartmentsqquantity of close apartmentsqincomes of potential renters.nHow the equilibrium changes if one of these exogenous variables changes?The chan
14、ge in the price of distant apartmentsnSuppose distant apartments become more expensive, what happens to the market equilibrium?qDemand for close apartments?qDemand curve? qThe price of the close apartments?Illustration of the effect of the price change of distant apartmentspQD,QSpe100The change of t
15、he quantity of close apartmentsnSuppose there were more close apartments, what happens to the market equilibrium?nHow will the curves change?nHow will the price for close departments change?Illustration of the effect of the quantity change of close apartmentspQD,QSpe100The change of potential renter
16、s incomenSuppose potential renters income rises, what happens to the market equilibrium?nWhat happens to the curves? Why?nHow does the price of close apartments change?Illustration of the effect of income changepQD,QSpe100Taxation Policy AnalysisnLocal government taxes apartment owners.nWhat happens
17、 toqpriceqquantity of close apartments rented?nIs any of the tax “passed” to renters?Taxation Policy AnalysisnMarket supply is unaffected.nMarket demand is unaffected.nSo the competitive market equilibrium is unaffected by the tax.nPrice and the quantity of close apartments rented are not changed.nL
18、andlords pay all of the tax.1.2.3. Imperfectly Competitive MarketsnWe discuss 3 possibilities:qa monopolistic landlordqa perfectly discriminatory monopolistic landlordqa competitive market subject to rent control.A Monopolistic LandlordnThe main property of a monopoly: only one seller in the market.
19、nPrice (p) and demand D(p) are determined at the same time.nRevenue = p D(p).nHow to set the price to maximize its revenue?Monopolistic Market EquilibriumpQD,QSMiddleprice100Vacant close apartments.Properties of a monopolynTo maximize its profit, a monopolist will restrict the output, therefore the
20、monopoly output qmqe.nThat means, the monopolist will generally charge a price that is higher than pe.Perfectly Discriminatory Monopolistic LandlordnImagine the monopolist knew everyones willingness-to-pay (reservation price).nCharge $500 to the most willing-to-pay,ncharge $490 to the 2nd most willi
21、ng-to-pay, etc.nEach apartment would be rented to the person who was willing to pay the most for it. Discriminatory Monopolistic Market EquilibriumpQD,QS100p1 =$500p2 =$49012p3 =$4753peDiscriminatory monopolistcharges the competitive marketprice to the last renter, andrents the competitive quantityo
22、f close apartments.Rent ControlnLocal government imposes a maximum legal price that is lower than the competitive price, i.e. pmax pe.Market EquilibriumpQD,QSpe100pmaxExcess demandThe 100 close apartments areno longer allocated bywillingness-to-pay (lottery, lines,large families first?).1.2.4. Which
23、 market outcomes are desirable?nFour possible ways of allocating apartments:qPerfect competitionqMonopolyqDiscriminatory monopolyqRent controlnWhich is better?Pareto EfficiencynVilfredo Pareto; 1848-1923.nA Pareto outcome allows no “wasted welfare”nPareto Improvement: if we can find a way to make so
24、me people better off without making anybody worse off.nPareto efficient: if an allocation is such that no Pareto improvements are possible.Pareto Efficiency: an examplenJill has an apartment; Jack does not.nJill values the apartment at $200; Jack would pay $400 for it.nJill could sublet the apartmen
25、t to Jack for $300.nBoth gain, so it was Pareto inefficient for Jill to have the apartment.Criterion for Pareto EfficiencynA Pareto inefficient outcome means there remain unrealized mutual gains-to-trade.nAny market outcome that achieves all possible gains-to-trade must be Pareto efficient.Is compet
26、itive equilibrium Pareto efficient? nCompetitive equilibrium:qall close apartment renters value them at the market price pe or moreqall others value close apartments at less than peqso no mutually beneficial trades remainqso the outcome is Pareto efficient.Pareto EfficiencynMonopoly:qnot all apartme
27、nts are occupiedqso a distant apartment renter could be assigned a close apartment and have higher welfare without lowering anybody elses welfare.qso the monopoly outcome is Pareto inefficient.Is the perfectly discriminatory monopoly Pareto efficient?nDiscriminatory Monopoly:qassignment of apartment
28、s is the same as with the perfectly competitive marketqso the discriminatory monopoly outcome is also Pareto efficient.Pareto EfficiencynRent Control:qsome close apartments are assigned to renters valuing them at below the competitive price peqsome renters valuing a close apartment above pe dont get close apartmentsqPareto inefficient outcome.
