microeconomicutilityanddemand(编辑修改稿)

microeconomicutilityanddemand(编辑修改稿)内容摘要：

spend, Lisa sees 6 movies and drinks 4 cases of soda a month. With $56 to spend, Lisa spends the extra $16, so she buys more of both goods. She sees 8 movies and drinks 6 cases of soda a month. Predictions of Marginal Utility Theory 169。 2020 Pearson AddisonWesley Figure illustrates these predictions. Predictions of Marginal Utility Theory 169。 2020 Pearson AddisonWesley The Paradox of Value The paradox of value ―Why is water, which is essential to life, far cheaper than diamonds, which are not essential?‖ is resolved by distinguishing between total utility and marginal utility. We use so much water that the marginal utility from water consumed is small, but the total utility is large. We buy few diamonds, so the marginal utility from diamonds is large, but the total utility is small. Predictions of Marginal Utility Theory 169。 2020 Pearson AddisonWesley Paradox Resolved The paradox is resolved by distinguishing between total utility and marginal utility. For water, the price is low, total utility is large, and marginal utility is small. For diamonds, the price is high, total utility is small, and marginal utility is high. But marginal utility per dollar is the same for water and diamonds. Predictions of Marginal Utility Theory 169。 2020 Pearson AddisonWesley Value and Consumer Surplus The supply of water is perfectly elastic, so the quantity of water consumed is large and the consumer surplus from water is large. In contrast, the supply of diamonds in perfectly inelastic, so the price is high and the consumer surplus from diamonds is small. Predictions … 169。 2020 Pearson AddisonWesley Temperature: An Analogy Utility is similar to temperature. Both are abstract concepts, and both have units of measurement that are arbitrary. The concept of utility helps us make predictions about consumption choices in much the same way that the concept of temperature enables us to predict when water will turn to ice or steam. The concept of utility helps us understand why people buy more of a good when its price falls and why people buy more of most goods when their ines increases. Predictions of Marginal Utility Theory 169。 2020 Pearson AddisonWesley Behavioral Economics Behavioral economics studies the ways in which limits on the human brain’s ability to pute and implement rational decisions influences economic behavior—both the decisions that people make and the consequences of those decisions for the way markets work. There are three impediments to rational choice:  Bounded rationality  Bounded willpower  Bounded selfinterest New Ways of Explaining Consumer Choices 169。 2020 Pearson AddisonWesley Bounded Rationality Bounded rationality is rationality that is bounded by the puting power of the human brain. Faced with uncertainty, consumers cannot rationally make choices and instead rely on other decisionmaking methods such as rules of thumb, listening to the views of others, or gut instinct. New Ways of Explaining Consumer Choices 169。 2020 Pearson AddisonWesley Bounded Willpower Bounded willpower is the lessthanperfect willpower that prevents us from making a decision that we know, at the time of implementing the decision, we will later regret. Bounded SelfInterest Bounded selfinterest is the limited selfinterest that sometimes results in suppressing our own interests to help others. Main applications are in finance where uncertainty is the key factor and savings where future is the key factor. New Ways of Explaining Consumer Choices 169。 2020 Pearson AddisonWesley One behavior observed by behavioral economists is more general and might affect your choices. The Endowment Effect The endowment effect is the tendency for people to value something more highly simply because they own it. New Ways of Explaining Consumer Choices 169。 2020 Pearson AddisonWesley Neuroeconomics Neuroeconomics is the study of the activity of the human brain when a person makes an economic decision. Different decisions appear to activate different areas of the brain. Some decisions are made  In the prefrontal cortex where memories are stored and data analyzed and might be deemed rational.  In the hippocampus where memories of anxiety and fear are stored and might be deemed irrational. New Ways of Explaining Consumer Choices 169。 2020 Pearson AddisonWesley Controversy Should economics focus on explaining the decisions we observe or should it focus on what goes on inside people’s heads? This is the controversy. For most economists, the goal of economics is to explain the decisions that we observe people make, and not to explain what goes on inside people’s heads. New Ways of Explaining Consumer Choices 169。 2020 Pearson AddisonWesley 169。 2020 Pearson AddisonWesley 9 POSSIBILITIES, PREFERENCES, AND CHOICES 169。 2020 Pearson AddisonWesley 169。 2020 Pearson AddisonWesley You buy your music online and play it on an iPod. As the prices of a music download and an iPod have tumbled, the volume of downloads and sales of iPods have skyrocketed. The price of a DVD has fallen and we’re buying ever more of them. But we’re also going to movie theaters in evergreater numbers. Why are we going to the movies more when it is cheaper to buy a DVD? This chapter studies a model of choice that answers this question. 169。 2020 Pearson AddisonWesley Consumption Possibilities Household consumption choices are constrained by its ine and the prices of the goods and se。