中微笔记1.docx

1 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 Discriminatory Monopoly: assignment of apartments is the same as with the perfectly competitive market so the discriminatory monopoly outcome is also Pareto efficient. 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 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 2Budget Constraint An ad valorem sales tax （从价营业税）levied at a rate of 5% increases all prices by 5%, from p to (1+0.05)p = 1.05p. A uniform ad valoremsales tax levied at rate tis equivalent to an incometax levied at rate 3Preferences A preference relation is “well-behaved” if it is Monotonic (单调) and convex (凸状). Monotonicity: More of any commodity is always preferred (i.e. no satiation and every commodity is a good). Convexity: Mixtures of bundles are (at least weakly) preferred to the bundles themselves. 4Utility The collection of all indifference curves for a given preference relation is an indifference map. An indifference map is equivalent to a utility function; each is the other 5Choice Meaning of the Tangency Condition：Consumer’s marginal willingness to pay equals the market exchange rate. Choosing Taxes: Various Taxes Quantity tax: on x: (p+t)x Value tax: on px: (1+t)px Also called ad valorem tax Lump sum tax: T Income tax: Can be proportional or lump sum 6Demand 7Revealed Preference 8Slutsky Equation 9Buying and Selling 10Intertemporal Choice Valuing Securities （证券） A financial security