中级微观经济学课件(第一章).pdfVIP

Chapter One The Market Appreciating Economic Modeling The Purpose of this Chapter • To begin to understand the art of building an economic model • To begin to understand three basic elements of modeling in economics: – Purpose – Simplification through assumptions – Value judgment The Purpose of an Economic Model • The purpose of an economic model is to help provide precise insights (精确的 洞察力）on a specific economic phenomenon. • Thus: – Different phenomena needs different model; – Simplification by assumption is necessary An Illustration: Modeling the Apartment Market • Purpose: How are apartment rents determined? Are rents “desirable”? • Simplifying assumptions: – apartments are close or distant, but otherwise identical – distant apartments rents are exo genous (外生变量）and known – many potential renters and landlords Two Very Common Modeling Assumptions – Rational Choice (理性选择）: Each person tries to choose the best alternative available to him or her. – Equilibrium （均衡）: economic agents interact with each other, resulting in an equilibrium, in which each person reaches an optimal decision given others’ decisions. Modeling Apartment 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