第四章Utility (一) 目的与要求 1.Present utility as a way to describe preference 2 Introduce utility function and some examples of utility functions 3.Introduce marginal utility 4.Master the relationship between Utility and Socialist Core Values (二)教学内容 1.主要内容 41 Cardinary utility 4 Constructing a utility function 43 Some examples of utility functions 4-4 Marginal utility 4-5 Marginal utility and MRS 4-6 Utility for commuting 4-7 Relationship between Utility and Socialist Core Values 4-8 Appendix:Derivation of the MRS by using calculus 2.基本概念和知识点 基本概念 Consumer preferences Ordinal utility onic transformation Cobb-Douglas indifference curves 知识点 (1).Autility function is simply a way to represent or summarize a preference ordering.The num ical itudes of utility levels have no ic meaning. (2).Thus,given any one utility function,any monotonic transformation of it will represent the same preferences. (3).The marginal rate of substitution,MRS,can be calculated from the atility function via the formula MRS=Ax1/x2=-MU1/MU2. (三)课后练习 1.Consider the utility function u(x1.x2)=(x1x).What kind of preferences dose it r epres nt?Is the fund v(x1.x2 x2 a monoton c trans ormation of u(x1,x2)?Is the function w(x1,x2)=x1*x1*x2*x2 a monotonic transformation of u(1,x2) (四)教学方法与手段 课堂讲授与讨论。 6
6 第四章 Utility （一） 目的与要求 1. Present utility as a way to describe preference 2. Introduce utility function and some examples of utility functions 3. Introduce marginal utility 4. Master the relationship between Utility and Socialist Core Values （二） 教学内容 1. 主要内容 4-1 Cardinary utility 4-2 Constructing a utility function 4-3 Some examples of utility functions 4-4 Marginal utility 4-5 Marginal utility and MRS 4-6 Utility for commuting 4-7 Relationship between Utility and Socialist Core Values 4-8 Appendix: Derivation of the MRS by using calculus 2. 基本概念和知识点 基本概念 Consumer preferences Ordinal utility Monotonic transformation Cobb-Douglas indifference curves 知识点 (1). A utility function is simply a way to represent or summarize a preference ordering. The numerical magnitudes of utility levels have no intrinsic meaning. (2). Thus, given any one utility function, any monotonic transformation of it will represent the same preferences. (3). The marginal rate of substitution, MRS, can be calculated from the utility function via the formula MRS = △x1/x2 = - MU1/MU2. （三） 课后练习 1. Consider the utility function u(x1,x2) = (x1*x2)1/2. What kind of preferences dose it represent? Is the function v(x1,x2)=x1*x1*x2 a monotonic transformation of u(x1,x2)? Is the function w(x1,x2) = x1*x1*x2*x2 a monotonic transformation of u(x1,x2)? （四） 教学方法与手段 课堂讲授与讨论
第五章Choice (一) 目的与要求 1.Examine the optimal choice by putting together the budge set and the theory of preference 2. Study consumer demand 3.Present some examples of consumer demand 4.Master the relationship between Choice and Socialist Core Values (二)教学内容 1.主要内容 5-1 Optimal choice 5-2 Consumer demand 5-3 Some examples 5-4 Estimating utility functions 5-5 Implications of the MRS condition 5-6 Choosing taxes 5-7 Relationship between Choice and Socialist Core Values Appendix:How to solve the preference-maximization problem 2.基本概念和知识点 基本概念 Optimal choice Boundary optimum Interior optimum Demand functior Income tax 知识占 (1).The optimal choice of the consum r is that bundle in the consumer's dget set that lies on the highest ir ndifference curve (2).Typically the optimal bundle will be characterized by the condition tha the slope of the indifference curve(the MRS)will equal the slope of the budget line. umption choice it may be possible toestimate at would generatet nat sort o choice behavio uch a utility function can be used to pred ict future choices and to estimate the utility to consumers of new economic policies. (4).Ifeveryone faces the same prices for the two goods,then everyone will have the same marginal rate of substitution,and will thus be willing to trade off the two goods in the same way (三) 课后练习 1.Suppose that indifference curves are described by straight lines with a slope of-b.Given arbitrary price and money income pl,p2 and m,what will the consumer's 7
7 第五章 Choice （一） 目的与要求 1. Examine the optimal choice by putting together the budge set and the theory of preference 2. Study consumer demand 3. Present some examples of consumer demand 4. Master the relationship between Choice and Socialist Core Values （二） 教学内容 1. 主要内容 5-1 Optimal choice 5-2 Consumer demand 5-3 Some examples 5-4 Estimating utility functions 5-5 Implications of the MRS condition 5-6 Choosing taxes 5-7 Relationship between Choice and Socialist Core Values 5-8 Appendix: How to solve the preference-maximization problem 2. 基本概念和知识点 基本概念 Optimal choice Boundary optimum Interior optimum Demand function Income tax 知识点 (1). The optimal choice of the consumer is that bundle in the consumer's budget set that lies on the highest indifference curve. (2). Typically the optimal bundle will be characterized by the condition that the slope of the indifference curve (the MRS) will equal the slope of the budget line. (3). If we observe several consumption choice it may be possible to estimate a utility function that would generate that sort of choice behavior. Such a utility function can be used to predict future choices and to estimate the utility to consumers of new economic policies. (4). If everyone faces the same prices for the two goods, then everyone will have the same marginal rate of substitution, and will thus be willing to trade off the two goods in the same way. （三） 课后练习 1. Suppose that indifference curves are described by straight lines with a slope of – b. Given arbitrary price and money income p1, p2 and m, what will the consumer’s
optimal choices look like? (四)教学方法与手段 课堂讲授与讨论。 第六章Demand (一) 目的与要求 1.Examine how the demand for a good changes as prices and income change 2.Examine normal and inferior goods 3.Examine ordinary and Giffen goods 4.Examine how to promote the healthy development of China's Cultural Industry (二)教学内容 1.主要内容 6-1 Normal and inferior goods 6-2 Income offer curves and Engel curves 6-3 Some examples 6.5 6-6 Some example 6-7 The inverse demand function 6-8 The Theory of Demand Level and the Healthy Development of China's Cultural Industry 2.基本概念和知识点 基本概念 Normal good Inferior good Engel curve Luxury good Necessary good Homothetic preferences Demand curve Reservation price Substitute Complement Inverse demand function Inverse demand curve 知识点 (1) The consumer's demand function for a good will in general depend on the prices of all goods and income (2).A normal good is one for which the demand increases when income increases.An inferior good is one for which the demand decreases when income increases (3). An ordinary good is one for which the demand decreases when its price increases.A Giffen good is one for which the demand increases when its price increases. (4).Ifthe demand for good 1 increases when the price of good 2 increases 8
8 optimal choices look like? （四） 教学方法与手段 课堂讲授与讨论。 第六章 Demand （一） 目的与要求 1. Examine how the demand for a good changes as prices and income change 2. Examine normal and inferior goods 3. Examine ordinary and Giffen goods 4. Examine how to promote the healthy development of China's Cultural Industry （二） 教学内容 1. 主要内容 6-1 Normal and inferior goods 6-2 Income offer curves and Engel curves 6-3 Some examples 6-4 Ordinary goods and Giffen goods 6-5 The price offer curve and the demand curve 6-6 Some examples 6-7 The inverse demand function 6-8 The Theory of Demand Level and the Healthy Development of China's Cultural Industry 2. 基本概念和知识点 基本概念 Normal good Inferior good Engel curve Luxury good Necessary good Homothetic preferences Demand curve Reservation price Substitute Complement Inverse demand function Inverse demand curve 知识点 (1). The consumer's demand function for a good will in general depend on the prices of all goods and income. (2). A normal good is one for which the demand increases when income increases. An inferior good is one for which the demand decreases when income increases. (3). An ordinary good is one for which the demand decreases when its price increases. A Giffen good is one for which the demand increases when its price increases. (4). If the demand for good 1 increases when the price of good 2 increases
then good 1 is a substitute for good 2.If he demand for good 1 decreases in this situation when it is a complement for good 2. (5).The inverse demand function measures the price at which a given qua nt y will be demard.The height of the dem and curv at a giver level of consumption measures willingness to pay for an additional uni of the good at that consumption level. (三)课后练习 1. w that Cobb-Douglas preferences are homothetic preferences 2. What is the form of the inverse demand function for good I in the case of perfect complements? (四)教学方法与手段 课堂讲授与讨论。 第七章Revealed Preference (一)目的与要求 1.Master the meaning of directly revealed preference 2.Master the meaning of indirectly revealed preference 3 Present WaRP and SARp 4.Learn well how to check WARP and SARP (二)教学内容 1.主要内容 5.7-1 Directly revealed preference 7-Indireetly revealed preference Weak Axiom of revealed preference 7-4 Strong Axiom of revealed preference 2.基本概念和知识点 基本概念 Directly revealed preference Indirectly revealed preference Weak axiom of revealed preference Strong axiom of revealed preference 知识点 (1)Suppose that the bundle x is chosen when the bundle y affordable.Then x is directly revealed preferred toy (2)Suppose x is revealed directly preferred to y,and y is revealed directly preferred toz.Then,by transitivity,x is indirectly revealed preferred toz. (3)Observing the choices of consumers can allow us to recover the preference that lie behind those choices.The more choices we observe,the more precisely we can estimate the underlying preference that generated those chioces
9 then good 1 is a substitute for good 2. If he demand for good 1 decreases in this situation, when it is a complement for good 2. (5). The inverse demand function measures the price at which a given quantity will be demand. The height of the demand curve at a given level of consumption measures willingness to pay for an additional unit of the good at that consumption level. （三） 课后练习 1. Show that Cobb-Douglas preferences are homothetic preferences. 2. What is the form of the inverse demand function for good 1 in the case of perfect complements? （四） 教学方法与手段 课堂讲授与讨论。 第七章 Revealed Preference （一） 目的与要求 1. Master the meaning of directly revealed preference 2. Master the meaning of indirectly revealed preference. 3. Present WARP and SARP 4. Learn well how to check WARP and SARP （二） 教学内容 1. 主要内容 5. 7-1 Directly revealed preference 7-2 Indirectly revealed preference 7-3 Weak Axiom of revealed preference 7-4 Strong Axiom of revealed preference 2. 基本概念和知识点 基本概念 Directly revealed preference Indirectly revealed preference Weak Axiom of revealed preference Strong Axiom of revealed preference 知识点 (1) Suppose that the bundle x is chosen when the bundle y affordable. Then x is directly revealed preferred to y. (2) Suppose x is revealed directly preferred to y, and y is revealed directly preferred to z. Then, by transitivity, x is indirectly revealed preferred to z. (3) Observing the choices of consumers can allow us to recover the preference that lie behind those choices. The more choices we observe, the more precisely we can estimate the underlying preference that generated those chioces
(4)The WARP and SARP are necessary conditions that consumer choices have to obey if they are to be consistent with the economic model of optimizing chioce (三)课后练习 1.Check SARPand WARP according to table 7.2 and 7.3 (四)教学方法与手段 课堂讲授与讨论。 第八章Slutsky Equation (一)目的与要求 6.Examine the substitution effect,the income effect and the total effect as the price of a good changes 7.Present the Law of Demand 8.Examine some examples of income and substitution effects 9.Examine Another(Hicks)substitution effects (二) 教学内容 1.主要内容 8-1 The Substitution Effect The Income Effect 83 The Total Chang In Demand 8-4 Rates of change 8-5 The law of demand 8-7 tioneffect Compensated demand cures 2.基本概念和知识点 基本概念 Giffen good Substitution effect Income effect The Law of Demand Compensated demand curve 知识点 (1).When the price of a good decreases,there will be two effects on consumption.The change in relative prices make the consumer want to consume more of the cheaper good.The increase in purchasing power due to the lower price increaseor decrease consumption,depending on whether the goods is a normal good or an inferior good (2).The change in demand due tothe change in relative prices is called the substitution effect,the change due to the change in purchasing power is called the income effect. 10
10 (4) The WARP and SARP are necessary conditions that consumer choices have to obey if they are to be consistent with the economic model of optimizing chioce. （三） 课后练习 1. Check SARP and WARP according to table 7.2 and 7.3 （四） 教学方法与手段 课堂讲授与讨论。 第八章 Slutsky Equation （一） 目的与要求 6. Examine the substitution effect, the income effect and the total effect as the price of a good changes 7. Present the Law of Demand 8. Examine some examples of income and substitution effects 9. Examine Another (Hicks) substitution effects （二） 教学内容 1. 主要内容 8-1 The Substitution Effect 8-2 The Income Effect 8-3 The Total Chang In Demand 8-4 Rates of change 8-5 The law of demand 8-6 Examples of income and substitution effect 8-7 Another substitution effect 8-8 Compensated demand cures 2. 基本概念和知识点 基本概念 Giffen good Substitution effect Income effect The Law of Demand Compensated demand curve 知识点 (1). When the price of a good decreases, there will be two effects on consumption. The change in relative prices make the consumer want to consume more of the cheaper good .The increase in purchasing power due to the lower price increase or decrease consumption, depending on whether the goods is a normal good or an inferior good. (2). The change in demand due to the change in relative prices is called the substitution effect; the change due to the change in purchasing power is called the income effect