中级微观经济学
Fall,2004
介绍
结构
?教员与助教
?要求
?教学大纲
?例子, market for apartments
WHO AM I?
?赵耀辉
?北京大学中国经济研究中心
?Office,504 CCER
? Phone,6275-4803
?Email,yhzhao@ccer.pku.edu.cn
?Office Hours,Wednesdays 4:00-5:00pm
助教
?廖志鹏,zpliao@pku.edu.cn
?张沈伟,jeswest@sohu.com
?赵洪春, zhaohongchun@pku.edu.cn
?Office Hours,Tuesdays 4:00-5:00pm
教材
Intermediate Microeconomics,
A Modern Approach (Sixth
Edition)
by Hal R,Varian
W,W,Norton,2003
作业
?几乎每次课后都有作业
?周一的作业在周四课前交
?周四的作业在周一课前交
?课后领回作业
?不交或迟交作业将不得分
考试
?两次测验，一次期中，一次期末
?注意考试日期
?测验和期中考试只考阶段内容
?期末考试将考全部课程内容
?除极特殊情况以外，缺考者得零分
?没有补考或者缓考
成绩
?家庭作业, 20％
?测验, 20％
?期中考试, 20％
?期末考试, 40％
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
Is Economics Useful?
?Becoming a thinker
?Changes the way you view life and
understand problems
?An all round major
Economics Graduates
Type of Employer % Graduates
Traditional Business 23.3
Government 18.4
Financial Business 17.7
Graduate School 13.7
Consulting Services 4.4
Private/public School 3.9
Law Firm 3.5
Other 9.8
Jobs for Economists
?Business economists
?Government economists
?Academic economists
Microeconomics
? Theory
? Applications
– Labor economics
– Economics of education
– Development economics
– Agricultural economics
– Industrial organizations
– Health economics
– ……
Course Outline
?Consumer theory (1-15)
?Producer theory (18-27)
?Market equilibrium (16-17,30-32)
?Special topics on equilibrium
Economic Modeling
? What causes what in economic systems?
– Which variables are determined outside
the model (exogenous)
– Which variables are to be determined by
the model (endogenous)
? At what level of detail shall we model an
economic phenomenon?
Modeling the Apartment Market
?Central question,How are apartment
rents determined?
?Suppose (simplifying assumptions)
–apartments are close or distant,but
otherwise identical
–distant apartments rents are
exogenous and known
–many potential renters and
landlords,i.e.,competitive market
A Normative Question
?Will the allocation of apartments be
desirable?
?Need to know:
– Who will rent close apartments?
– At what price?
Two Principles in Economics
?Optimization,Each person tries to
choose the best alternative available
to him or her.
?Equilibrium,Market price adjusts
until quantity demanded equals
quantity supplied.
Modeling Individual Demand
? Discrete commodity,0 or 1 unit
? Choose either distant or close apartment
? Close apartments are more desirable but
more expensive
? Tend to choose close apartment if
– Distant apartments are also expensive.
– Higher income.
? Decide,The maximum rent you are willing
to pay for a close apartment.
Modeling Market 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
$490 before a 2nd person would rent,
Then p = $490 ? QD = 2.
Modeling Apartment Demand
?The lower is the rental rate p,the
larger is the quantity of close
apartments demanded
p ?? QD ?.
?The quantity demanded vs,price
graph is the market demand curve
for close apartments.
Market Demand Curve for
Apartments
p
QD
Modeling Apartment Supply
?Supply,It takes time to build more
close apartments so in this short-run
the quantity available is fixed (at say
100).
Market Supply Curve for
Apartments
p
QS100
Competitive Market Equilibrium
?,low” rental price ? quantity
demanded of close apartments
exceeds quantity available ? price
will rise.
?“high” rental price ? quantity
demanded less than quantity
available ? price will fall.
Competitive Market Equilibrium
?Quantity demanded = quantity available
? price will neither rise nor fall
?so the market is at a competitive
equilibrium.
Competitive Market Equilibrium
p
QD,QS100
Competitive Market Equilibrium
p
QD,QS
pe
100
Competitive Market Equilibrium
p
QD,QS
pe
100
People willing to pay pe for
close apartments get close
apartments.
Competitive Market Equilibrium
p
QD,QS
pe
100
People willing to pay pe for
close apartments get close
apartments.
People not willing to pay
pe for close apartments
get distant apartments.
Competitive Market Equilibrium
?Q,Who rents the close apartments?
?A,Those most willing to pay.
?Q,Who rents the distant
apartments?
?A,Those least willing to pay.
?So the competitive market allocation
is by,willingness-to-pay”.
Comparative Statics
?What is exogenous in the model?
–price of distant apartments
–quantity of close apartments
–incomes of potential renters.
?What happens if these exogenous
variables change?
Comparative Statics
?Suppose the price of distant
apartment rises.
?Demand for close apartments
increases (rightward shift),causing
?a higher price for close apartments.
Market Equilibrium
p
QD,QS
pe
100
Market Equilibrium
p
QD,QS
pe
100
Higher demand
Market Equilibrium
p
QD,QS
pe
100
Higher demand causes higher
market price; same quantity
traded.
Comparative Statics
?Suppose there were more close
apartments.
?Supply is greater,so
?the price for close apartments falls.
Market Equilibrium
p
QD,QS
pe
100
Market Equilibrium
p
QD,QS100
Higher supply
pe
Market Equilibrium
p
QD,QS
pe
100
Higher supply causes a
lower market price and a
larger quantity traded.
Comparative Statics
?Suppose potential renters’ incomes
rise,increasing their willingness-to-
pay for close apartments.
?Demand rises (upward shift),causing
higher price for close apartments.
Market Equilibrium
p
QD,QS
pe
100
Market Equilibrium
p
QD,QS
pe
100
Higher incomes cause
higher willingness-to-pay
Market Equilibrium
p
QD,QS
pe
100
Higher incomes cause
higher willingness-to-pay,
higher market price,and
the same quantity traded.
Imperfectly Competitive Markets
?Amongst many possibilities are:
–a monopolistic landlord
–a perfectly discriminatory
monopolistic landlord
–a competitive market subject to
rent control.
A Monopolistic Landlord
?When the landlord sets a rental price
p he rents D(p) apartments.
?Revenue = pD(p).
?Revenue is low if p ? 0
?Revenue is low if p is so high that
D(p) ? 0.
?An intermediate value for p
maximizes revenue.
Monopolistic Market Equilibrium
p
QD
Low
price
Low price,high quantity
demanded,low revenue.
Monopolistic Market Equilibrium
p
QD
High
price
High price,low quantity
demanded,low revenue.
Monopolistic Market Equilibrium
p
QD
Middle
price
Middle price,medium quantity
demanded,larger revenue.
Monopolistic Market Equilibrium
p
QD,QS
Middle
price
Middle price,medium quantity
demanded,larger revenue.
Monopolist does not rent all the
close apartments.
100
Monopolistic Market Equilibrium
p
QD,QS
Middle
price
Middle price,medium quantity
demanded,larger revenue.
Monopolist does not rent all the
close apartments.
100
Vacant close apartments.
Perfectly Discriminatory
Monopolistic Landlord
?Imagine the monopolist knew
everyone’s willingness-to-pay.
?Charge $500 to the most willing-to-
pay,
?charge $490 to the 2nd most willing-
to-pay,etc.
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
1
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
p2 =$490
12
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
p2 =$490
12
p3 =$475
3
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
p2 =$490
12
p3 =$475
3
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
p2 =$490
12
p3 =$475
3
pe
Discriminatory monopolist
charges the competitive market
price to the last renter,and
rents the competitive quantity
of close apartments.
Rent Control
?Local government imposes a
maximum legal price,pmax < pe,the
competitive price.
Market Equilibrium
p
QD,QS
pe
100
Market Equilibrium
p
QD,QS
pe
100
pmax
Market Equilibrium
p
QD,QS
pe
100
pmax
Excess demand
Market Equilibrium
p
QD,QS
pe
100
pmax
Excess demand
The 100 close apartments are
no longer allocated by
willingness-to-pay (lottery,lines,
large families first?).
Which Market Outcomes Are
Desirable?
?Which is better?
–Rent control
–Perfect competition
–Monopoly
–Discriminatory monopoly
Pareto Efficiency
?Vilfredo Pareto; 1848-1923.
?A Pareto outcome allows no,wasted
welfare”;
?i.e,the only way one person’s
welfare can be improved is to lower
another person’s welfare,
Pareto Efficiency
?Jill has an apartment; Jack does not.
?Jill values the apartment at $200; Jack
would pay $400 for it.
?Jill could sublet the apartment to Jack
for $300.
?Both gain,so it was Pareto inefficient
for Jill to have the apartment.
Criterion for Pareto Efficiency
?A Pareto inefficient outcome means
there remain unrealized mutual
gains-to-trade.
?Any market outcome that achieves
all possible gains-to-trade must be
Pareto efficient.
Pareto Efficiency
?Competitive equilibrium:
–all close apartment renters value
them at the market price pe or more
–all others value close apartments
at less than pe
–so no mutually beneficial trades
remain
–so the outcome is Pareto efficient.
Pareto Efficiency
?Discriminatory Monopoly:
–assignment of apartments is the
same as with the perfectly
competitive market
–so the discriminatory monopoly
outcome is also Pareto efficient.
Pareto Efficiency
?Monopoly:
–not all apartments are occupied
–so a distant apartment renter could
be assigned a close apartment and
have higher welfare without
lowering anybody else’s welfare.
–so the monopoly outcome is
Pareto inefficient.
Pareto Efficiency
?Rent Control:
–some close apartments are assigned
to renters valuing them at below the
competitive price pe
–some renters valuing a close
apartment above pe don’t get close
apartments
–Pareto inefficient outcome.
Harder Questions
?Over time,will
–the supply of close apartments
increase?
–rent control decrease the supply of
apartments?
–a monopolist supply more
apartments than a competitive
rental market?
Testing Hypotheses
?What cause rents to change?
–price of distant apartments
–incomes of potential renters
–quantity of close apartments.
?Need econometrics
Fall,2004
介绍
结构
?教员与助教
?要求
?教学大纲
?例子, market for apartments
WHO AM I?
?赵耀辉
?北京大学中国经济研究中心
?Office,504 CCER
? Phone,6275-4803
?Email,yhzhao@ccer.pku.edu.cn
?Office Hours,Wednesdays 4:00-5:00pm
助教
?廖志鹏,zpliao@pku.edu.cn
?张沈伟,jeswest@sohu.com
?赵洪春, zhaohongchun@pku.edu.cn
?Office Hours,Tuesdays 4:00-5:00pm
教材
Intermediate Microeconomics,
A Modern Approach (Sixth
Edition)
by Hal R,Varian
W,W,Norton,2003
作业
?几乎每次课后都有作业
?周一的作业在周四课前交
?周四的作业在周一课前交
?课后领回作业
?不交或迟交作业将不得分
考试
?两次测验，一次期中，一次期末
?注意考试日期
?测验和期中考试只考阶段内容
?期末考试将考全部课程内容
?除极特殊情况以外，缺考者得零分
?没有补考或者缓考
成绩
?家庭作业, 20％
?测验, 20％
?期中考试, 20％
?期末考试, 40％
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
Is Economics Useful?
?Becoming a thinker
?Changes the way you view life and
understand problems
?An all round major
Economics Graduates
Type of Employer % Graduates
Traditional Business 23.3
Government 18.4
Financial Business 17.7
Graduate School 13.7
Consulting Services 4.4
Private/public School 3.9
Law Firm 3.5
Other 9.8
Jobs for Economists
?Business economists
?Government economists
?Academic economists
Microeconomics
? Theory
? Applications
– Labor economics
– Economics of education
– Development economics
– Agricultural economics
– Industrial organizations
– Health economics
– ……
Course Outline
?Consumer theory (1-15)
?Producer theory (18-27)
?Market equilibrium (16-17,30-32)
?Special topics on equilibrium
Economic Modeling
? What causes what in economic systems?
– Which variables are determined outside
the model (exogenous)
– Which variables are to be determined by
the model (endogenous)
? At what level of detail shall we model an
economic phenomenon?
Modeling the Apartment Market
?Central question,How are apartment
rents determined?
?Suppose (simplifying assumptions)
–apartments are close or distant,but
otherwise identical
–distant apartments rents are
exogenous and known
–many potential renters and
landlords,i.e.,competitive market
A Normative Question
?Will the allocation of apartments be
desirable?
?Need to know:
– Who will rent close apartments?
– At what price?
Two Principles in Economics
?Optimization,Each person tries to
choose the best alternative available
to him or her.
?Equilibrium,Market price adjusts
until quantity demanded equals
quantity supplied.
Modeling Individual Demand
? Discrete commodity,0 or 1 unit
? Choose either distant or close apartment
? Close apartments are more desirable but
more expensive
? Tend to choose close apartment if
– Distant apartments are also expensive.
– Higher income.
? Decide,The maximum rent you are willing
to pay for a close apartment.
Modeling Market 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
$490 before a 2nd person would rent,
Then p = $490 ? QD = 2.
Modeling Apartment Demand
?The lower is the rental rate p,the
larger is the quantity of close
apartments demanded
p ?? QD ?.
?The quantity demanded vs,price
graph is the market demand curve
for close apartments.
Market Demand Curve for
Apartments
p
QD
Modeling Apartment Supply
?Supply,It takes time to build more
close apartments so in this short-run
the quantity available is fixed (at say
100).
Market Supply Curve for
Apartments
p
QS100
Competitive Market Equilibrium
?,low” rental price ? quantity
demanded of close apartments
exceeds quantity available ? price
will rise.
?“high” rental price ? quantity
demanded less than quantity
available ? price will fall.
Competitive Market Equilibrium
?Quantity demanded = quantity available
? price will neither rise nor fall
?so the market is at a competitive
equilibrium.
Competitive Market Equilibrium
p
QD,QS100
Competitive Market Equilibrium
p
QD,QS
pe
100
Competitive Market Equilibrium
p
QD,QS
pe
100
People willing to pay pe for
close apartments get close
apartments.
Competitive Market Equilibrium
p
QD,QS
pe
100
People willing to pay pe for
close apartments get close
apartments.
People not willing to pay
pe for close apartments
get distant apartments.
Competitive Market Equilibrium
?Q,Who rents the close apartments?
?A,Those most willing to pay.
?Q,Who rents the distant
apartments?
?A,Those least willing to pay.
?So the competitive market allocation
is by,willingness-to-pay”.
Comparative Statics
?What is exogenous in the model?
–price of distant apartments
–quantity of close apartments
–incomes of potential renters.
?What happens if these exogenous
variables change?
Comparative Statics
?Suppose the price of distant
apartment rises.
?Demand for close apartments
increases (rightward shift),causing
?a higher price for close apartments.
Market Equilibrium
p
QD,QS
pe
100
Market Equilibrium
p
QD,QS
pe
100
Higher demand
Market Equilibrium
p
QD,QS
pe
100
Higher demand causes higher
market price; same quantity
traded.
Comparative Statics
?Suppose there were more close
apartments.
?Supply is greater,so
?the price for close apartments falls.
Market Equilibrium
p
QD,QS
pe
100
Market Equilibrium
p
QD,QS100
Higher supply
pe
Market Equilibrium
p
QD,QS
pe
100
Higher supply causes a
lower market price and a
larger quantity traded.
Comparative Statics
?Suppose potential renters’ incomes
rise,increasing their willingness-to-
pay for close apartments.
?Demand rises (upward shift),causing
higher price for close apartments.
Market Equilibrium
p
QD,QS
pe
100
Market Equilibrium
p
QD,QS
pe
100
Higher incomes cause
higher willingness-to-pay
Market Equilibrium
p
QD,QS
pe
100
Higher incomes cause
higher willingness-to-pay,
higher market price,and
the same quantity traded.
Imperfectly Competitive Markets
?Amongst many possibilities are:
–a monopolistic landlord
–a perfectly discriminatory
monopolistic landlord
–a competitive market subject to
rent control.
A Monopolistic Landlord
?When the landlord sets a rental price
p he rents D(p) apartments.
?Revenue = pD(p).
?Revenue is low if p ? 0
?Revenue is low if p is so high that
D(p) ? 0.
?An intermediate value for p
maximizes revenue.
Monopolistic Market Equilibrium
p
QD
Low
price
Low price,high quantity
demanded,low revenue.
Monopolistic Market Equilibrium
p
QD
High
price
High price,low quantity
demanded,low revenue.
Monopolistic Market Equilibrium
p
QD
Middle
price
Middle price,medium quantity
demanded,larger revenue.
Monopolistic Market Equilibrium
p
QD,QS
Middle
price
Middle price,medium quantity
demanded,larger revenue.
Monopolist does not rent all the
close apartments.
100
Monopolistic Market Equilibrium
p
QD,QS
Middle
price
Middle price,medium quantity
demanded,larger revenue.
Monopolist does not rent all the
close apartments.
100
Vacant close apartments.
Perfectly Discriminatory
Monopolistic Landlord
?Imagine the monopolist knew
everyone’s willingness-to-pay.
?Charge $500 to the most willing-to-
pay,
?charge $490 to the 2nd most willing-
to-pay,etc.
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
1
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
p2 =$490
12
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
p2 =$490
12
p3 =$475
3
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
p2 =$490
12
p3 =$475
3
Discriminatory Monopolistic
Market Equilibrium
p
QD,QS100
p1 =$500
p2 =$490
12
p3 =$475
3
pe
Discriminatory monopolist
charges the competitive market
price to the last renter,and
rents the competitive quantity
of close apartments.
Rent Control
?Local government imposes a
maximum legal price,pmax < pe,the
competitive price.
Market Equilibrium
p
QD,QS
pe
100
Market Equilibrium
p
QD,QS
pe
100
pmax
Market Equilibrium
p
QD,QS
pe
100
pmax
Excess demand
Market Equilibrium
p
QD,QS
pe
100
pmax
Excess demand
The 100 close apartments are
no longer allocated by
willingness-to-pay (lottery,lines,
large families first?).
Which Market Outcomes Are
Desirable?
?Which is better?
–Rent control
–Perfect competition
–Monopoly
–Discriminatory monopoly
Pareto Efficiency
?Vilfredo Pareto; 1848-1923.
?A Pareto outcome allows no,wasted
welfare”;
?i.e,the only way one person’s
welfare can be improved is to lower
another person’s welfare,
Pareto Efficiency
?Jill has an apartment; Jack does not.
?Jill values the apartment at $200; Jack
would pay $400 for it.
?Jill could sublet the apartment to Jack
for $300.
?Both gain,so it was Pareto inefficient
for Jill to have the apartment.
Criterion for Pareto Efficiency
?A Pareto inefficient outcome means
there remain unrealized mutual
gains-to-trade.
?Any market outcome that achieves
all possible gains-to-trade must be
Pareto efficient.
Pareto Efficiency
?Competitive equilibrium:
–all close apartment renters value
them at the market price pe or more
–all others value close apartments
at less than pe
–so no mutually beneficial trades
remain
–so the outcome is Pareto efficient.
Pareto Efficiency
?Discriminatory Monopoly:
–assignment of apartments is the
same as with the perfectly
competitive market
–so the discriminatory monopoly
outcome is also Pareto efficient.
Pareto Efficiency
?Monopoly:
–not all apartments are occupied
–so a distant apartment renter could
be assigned a close apartment and
have higher welfare without
lowering anybody else’s welfare.
–so the monopoly outcome is
Pareto inefficient.
Pareto Efficiency
?Rent Control:
–some close apartments are assigned
to renters valuing them at below the
competitive price pe
–some renters valuing a close
apartment above pe don’t get close
apartments
–Pareto inefficient outcome.
Harder Questions
?Over time,will
–the supply of close apartments
increase?
–rent control decrease the supply of
apartments?
–a monopolist supply more
apartments than a competitive
rental market?
Testing Hypotheses
?What cause rents to change?
–price of distant apartments
–incomes of potential renters
–quantity of close apartments.
?Need econometrics
