微观经济学第二章顾客行为Consumer Behavior.pptVIP

Autumn 2007 Lecture2,XinyuLecture 2 Consumer Behavior Topics to be Discussed 2.1 Preferences and Utility 2.2 Budget Constraints 2.3 Consumer Choices 2.4 Cardinal Utility and Consumer Equilibrium 2.5 A Mathematical Treatment Consumer Behavior There are three steps involved in the study of consumer behavior. 1) We will study consumer preferences. To describe how and why people prefer one good to another. Consumer Behavior There are three steps involved in the study of consumer behavior. 2) Then we will turn to budget constraints. People have limited incomes. Consumer Behavior There are three steps involved in the study of consumer behavior. 3) Finally, we will combine consumer preferences and budget constraints to determine consumer choices. What combination of goods will consumers buy to maximize their satisfaction? 2.1 Preferences and Utility A market basket (consumption bundle, consumption combination) is a collection of one or more goods (“goods”). One market basket may be preferred over another market basket containing a different combination of goods. 2.1.1 Consumer Preferences Preferences Relations Four Basic Assumptions/Properties 2.1.1 Consumer Preferences 1) Completeness 2) Transitivity 3) Desirability: Consumers always prefer more of any good to less. 4) Convexity 2.1.2 Indifference Curves and Utility Indifference curves represent all combinations of market baskets that provide the same level of satisfaction to a person. 2.1.2 Indifference Curves and Utility A 20 30 B 10 50 D 40 20 E 30 40 G 10 20 H 10 40 2.1.2 Indifference Curves and Utility 2.1.2 Indifference Curves and Utility 2.1.2 Indifference Curves and Utility Indifference Curves Indifference curves slope downward to the right. Any market basket lying above and to the right of an indifference curve is preferred to any market basket that lies on the indifference curve. indifference curves cannot cross. Indifference curves are convex, or bowed inward. (Dimin