Chapter one includes: a1.1 Defining Microeconomics 12 Economic Theories and Models 1 3 The Mathematics of Optimization 1.4 Demand-Supply Model Chapter 1
Chapter 1 20 Chapter one includes: 1.1 Defining Microeconomics 1.2 Economic Theories and Models 1.3 The Mathematics of Optimization 1.4 Demand-Supply Model
1.2 Theories and models (理论与模型) Output (product) markets Goods Services Supply Demand Firms Households Supply in output markets Demand in output markets Demand in Inp ut markets Supply in input markets Demand Supply Input (resource) markets Labor (wages) Capital (profit, interest) Land (rent) Chapter 1
Chapter 1 21 1.2 Theories and Models (理论与模型)
Theories and Models(1) Microeconomic analysis--Theories a Theories are used to explain observed phenomena in terms of a set of basic rules and assumptions a For example The theory of the Firm The Theory of Consumer Behavior Chapter 1
Chapter 1 22 Theories and Models(1) Microeconomic Analysis——Theories Theories are used to explain observed phenomena in terms of a set of basic rules and assumptions. For example The Theory of the Firm The Theory of Consumer Behavior
Theories and Models(2) Microeconomic Analysis- Models Models a Simple theoretical descriptions that capture the essentials of how the economy works Chapter 1
Chapter 1 23 Theories and Models(2) Microeconomic Analysis—— Models Models: Simple theoretical descriptions that capture the essentials of how the economy works
Theories and models (3) General features of economic Model 1. The Ceteris Paribus assumption (其他条件均相同假设) Other things equal 2. Optimization assumption(最优化假设) Consumers-Maximizing their own well-being Firms--Maximizing profits Government regulator-Maximizing public welfare Chapter 1 24
Chapter 1 24 Theories and Models ( 3 ) General Features of Economic Model: 1. The Ceteris Paribus Assumption (其他条件均相同假设) Other things equal 2. Optimization Assumption(最优化假设) Consumers——Maximizing their own well-being. Firms——Maximizing Profits Government regulator——Maximizing public welfare