Chapter Fourteen Consumer's Surplus 消费者剩余
Chapter Fourteen Consumer’s Surplus 消费者剩余
Structure Money equivalent of utility gains to trade ◆ Consumers surp|Us Changes in consumer's surplus 4 Compensating and equivalent variations ◆ Producer' s surplus
Structure ◆Money equivalent of utility gains to trade ◆Consumer’s surplus ◆Changes in consumer’s surplus ◆Compensating and equivalent variations ◆Producer’s surplus
Monetary measures of Gains-to T rade You can buy as much gasoline as you wish at $1 per gallon once you enter the gasoline market Q: What is the most you would pay to enter the market? A: You would pay up to the dollar value of the gains-to-trade you would enjoy once in the market
Monetary Measures of Gains-toTrade ◆You can buy as much gasoline as you wish at $1 per gallon once you enter the gasoline market. ◆Q: What is the most you would pay to enter the market? ◆A: You would pay up to the dollar value of the gains-to-trade you would enjoy once in the market
Monetary Measures of Gains-to Trade e How can such gains-to-trade be measured? e Three such measures are: ● Consumer' s Surplus ● Equivalent variation(等价变换),and Compensating Variation(补偿变换) Only in one special circumstance do these three measures coincide
◆ How can such gains-to-trade be measured? ◆ Three such measures are: ⚫Consumer’s Surplus ⚫Equivalent Variation （等价变换）, and ⚫Compensating Variation （补偿变换）. ◆ Only in one special circumstance do these three measures coincide. Monetary Measures of Gains-toTrade
S Equivalent Utility gains e Use r to denote the most a consumer would pay for a 1st gallon -reservation price(保留价格) for the1 st gallon ◆r1 is the dollar equiⅳ alent of the marginal utility of the 1st gallon use r2 to denote the most she would pay for a 2nd gallon -this is her reservation price for the 2nd gallon r2 is the dollar equivalent of the marginal utility of the 2nd gallon
◆ Use r1 to denote the most a consumer would pay for a 1st gallon -- reservation price （保留价格）for the 1st gallon. ◆ r1 is the dollar equivalent of the marginal utility of the 1st gallon. ◆ use r2 to denote the most she would pay for a 2nd gallon -- this is her reservation price for the 2nd gallon. ◆ r2 is the dollar equivalent of the marginal utility of the 2nd gallon. $ Equivalent Utility Gains