微观经济学第三章需求分析和不确定性Demand Analysis and Uncertainty.ppt

Autumn 2007 Lecture3,XinyuLecture 3 Demand Analysis and Uncertainty Topics to be Discussed 3.1 Individual Demand The Effects of Changes in Income and Prices Income and Substitution Effects 3.2 Market Demand From Individual to Market Demand Network Externalities Topics to be Discussed 3.3 Choice Under Uncertainty Describing Risk Preferences Toward Risk Reducing Risk 3.1 Individual Demand 3.1.1 The Effects of Changes in Income and Prices Price Changes Using the figures developed in the previous chapter, the impact of a change in the price of food can be illustrated using indifference curves. 3.1.1 The Effects of Changes in Income and Prices 3.1.1 The Effects of Changes in Income and Prices 3.1.1 The Effects of Changes in Income and Prices 3.1.1 The Effects of Changes in Income and Prices Two Important Properties of Demand Curves 1) The level of utility that can be attained changes as we move along the curve. 2) At every point on the demand curve, the consumer is maximizing utility by satisfying the condition that the MRS of food for clothing equals the ratio of the prices of food and clothing. 3.1.1 The Effects of Changes in Income and Prices Income Changes Using the figures developed in the previous chapter, the impact of a change in the income can be illustrated using indifference curves. 3.1.1 The Effects of Changes in Income and Prices 3.1.1 The Effects of Changes in Income and Prices 3.1.1 The Effects of Changes in Income and Prices Income Changes The income-consumption curve traces out the utility-maximizing combinations of food and clothing associated with every income level. An increase in income shifts the budget line to the right, increasing consumption along the income-consumption curve. Simultaneously, the increase in income shifts the demand curve to the right. 3.1.1 The Effects of Changes in Income and Prices Income Changes When the income-consumption curve has a positive slope: The quantity demanded increases with income. The income e