经济学英文(复旦大学-周翼)PPT课件.ppt

1、Chapter 1Economics and the EconomyDavid Begg, Stanley Fischer and Rudiger Dornbusch, Economics, 6th Edition, McGraw-Hill, 2000Power Point presentation by Peter Smith1.1What is Economics?nECONOMICS .nis the study of how society decides:WhatFor whomHowto produce.1.2The price of oil05101520253035401965

2、197519851995US$ per barrelTripled in 1973-74, and doubled again in 1979-80 and affected people all over the world.1.3An increase in the price of oil affectsnWhat to produceless oil-intensive productsnHow to produceless oil-intensive techniquesnFor whom to produceoil producers have more buying power,

3、 importers have less1.4The distribution of world population and GNP, 19980%10%20%30%40%50%60%70%80%90%100%PopulationGNPLICMICHIC1.5Scarcity forces choices to be madenOpportunity cost na crucial concept in economic analysisnthe quantity of other goods that must be sacrificed to obtain another unit of

4、 a good1.6The production possibility frontierFor each level of the output of one good,the production possibility frontier showsthe maximum amount of the other good that can be produced.Film outputFood outputProduction possibility frontier1.7The operation of marketsnMarketa shorthand expression for t

5、he process by which households decisions about consumption of alternative goodsfirms decisions about what and how to produceand workers decisions about how much and for whom to worknare all reconciled by adjustment of prices1.8Resource allocationnResource allocation is crucial for a societynand is h

6、andled in different ways in different societies, e.g.:Command economyMixed economyFree market1.9Market orientationCubaChinaHungarySwedenUKUSAHong KongCommandeconomyFreemarketeconomy1.10Normative and Positive EconomicsnPositive economics deals with objective explanatione.g. if a tax is imposed on a g

7、ood its price will tend to risenNormative economics offers prescriptions based on value judgementse.g. a tax SHOULD be imposed on tobacco to discourage smoking1.11Micro and MacronMicroeconomicsoffers a detailed treatment of individual economic decisions about particular commoditiesnMacroeconomicsemp

8、hasizes the interactions in the economy as a wholeChapter 2The tools of economic analysisDavid Begg, Stanley Fischer and Rudiger Dornbusch, Economics, 6th Edition, McGraw-Hill, 2000Power Point presentation by Peter Smith1.13Models and datanModela framework based on simplifying assumptionshelps to or

9、ganize our economic thinkingnDatathe economists link with the real worldtime seriescross section1.14Real and nominalnMany economic variables are measured in money termsnNominal valuesmeasured in current pricesnReal valuesadjusted for price changes compared with a base yearmeasured in constant prices

10、1.15DiagramsReal fares 1979-199802468101214161979 1981 1983 1985 1987 1989 1991 1993 1995 1997Real fare (1998 pence) help to analyze patterns and trends in data1.16Economic models: an examplenTo organize our thinking we need a simplified picture of realitynfocusing on key elementsnQuantity of tube j

11、ourneys demanded = f(Prices, income, preferences)1.17RelationshipsFares and revenues 1979-9891011121314155006007008009001000Real revenue (mn 1998 prices)Real fare (1998 pence)Diagrams help economists to explore relationshipsbetween economic variables 1.18Evidence in economicsnScatter diagrams help u

12、s to confront economic theory with empirical realitynEconometrics takes this further using statistical techniquesnEvidence may allow us to reject a theorynor accumulate support for itChapter 3Demand, supply, and the marketDavid Begg, Stanley Fischer and Rudiger Dornbusch, Economics, 6th Edition, McG

13、raw-Hill, 2000Power Point presentation by Peter Smith1.20Some key termsnMarketa set of arrangements by which buyers and sellers are in contact to exchange goods or servicesnDemandthe quantity of a good buyers wish to purchase at each conceivable pricenSupplythe quantity of a good sellers wish to sel

14、l at each conceivable pricenEquilibrium priceprice at which quantity supplied = quantity demanded3.21The Demand curve shows the relation between price and quantity demanded holding other things constantn“Other things” include:the price of related goodsconsumer incomesconsumer preferencesnChanges in

15、these other things affect the position of the demand curveDQuantityPrice3.22The Supply curve shows the relation between price and quantity supplied holding other things constantn“Other things” include:technologyinput costsgovernment regulationsnChanges in these other things affect the position of th

16、e demand curveQuantityPriceS3.23Market equilibriumnMarket equilibrium is at E0 where quantity demanded equals quantity suppliedwith price P0 and quantity Q0D0D0SSQ0P0E0PriceQuantity3.24Market equilibriumnIf price were above P0 there would be excess supplyproducers wish to supply more than consumers

17、wish to demandD0D0SSQ0P0E0PriceQuantity1.25A shift in demandD0D0SSQ0P0E0PriceQuantityIf the price of a substitute good increases .more will be demanded ateach priceD1D1The demand curve shiftsfrom D0D0 to D1D1.E1Q1P1The market moves to a new equilibrium at E1.1.26A shift in supplyDDQ0P0E0PriceQuantit

18、ySuppose safety regulations are tightened, increasing producers costsS0S0S1S1The supply curve shifts to S1S1If price stayed at P0 there would be excess demandQ1P1E2So the market moves to a new equilibrium at E2.3.27Two ways in which demand may increasen(1) A movement along the demand curve from A to

19、 Bnrepresents consumer reaction to a price changenthis could follow a supply shiftABP0P1Q0Q1QuantityPriceD3.28Two ways in which demand may increasen(2) A movement of the demand curve from D0 to D1nleads to an increase in demand at each pricene.g. at P0 quantity demanded increases from Q0 to Q1ABP0Q0

20、Q1CD0D1QuantityPrice3.29A market in disequilibriumnSuppose a disastrous harvest moves the supply curve to SSngovernment may try to protect the poor, setting a price ceiling at P1nwhich is below P0, the equilibrium price levelnRATIONING is needed to cope with the resulting excess demandQuantityPriceP

21、0Q0Q1DSSP1EABP21.30What, How and For WhomnThe market:decides how much of a good should be producednby finding the price at which the quantity demanded equals the quantity suppliedtells us for whom the goods are producednthose consumers willing to pay the equilibrium pricedetermines what goods are be

22、ing producednthere may be goods for which no consumer is prepared to pay a price at which firms would be willing to supplyChapter 4Government in the mixed economyDavid Begg, Stanley Fischer and Rudiger Dornbusch, Economics, 6th Edition, McGraw-Hill, 2000Power Point presentation by Peter Smith1.32Wha

23、t do governments do?ncreate laws, rules and regulationsnbuy and sell goods and servicesnmake transfer paymentsnimpose taxesntry to stabilize the economynaffect the allocation of resources1.33Government spending0102030405060% of national income1880192919602000The scale of government activity has grow

24、n steadily in industrial countries since 1880JapanUSAGermanyUKFranceSweden1.34What should governments do?nGovernments may be justified in intervening in the economy in the presence of market failurenSix ways in which intervention may improve the allocation of resources:1.35What should governments do

25、?n(1) The business cycledecisions on taxation and spending may affect the business cyclenot always favourablyn(2) Public goodsgoods that, even if consumed by one person, are still available for consumption by others e.g. clean airthe free-rider problem prevents the market from achieving production o

26、f the “right” amount of such goods.1.36What should governments do?n(3)Externalitiescosts and benefits of production are not always reflected in market pricese.g. pollution, congestion.n(4)Information-related problemsprivate markets may not produce the “right” kinds and amounts of informatione.g. foo

27、d labelling, health and safety regulations.1.37What should governments do?n(5)Monopoly and market powerresource allocation may be improved by limiting or regulating the market power of monopoly firmsn(6)Income redistribution and merit goodsconcern with equity issuese.g. protecting vulnerable groupsm

28、erit goods are goods that society thinks people should consume regardless of incomee.g. health, education1.38Who pays a commodity tax?DSSQ0P0QuantityPriceWith no tax, market equilibrium is at P0, Q0SSQ1P1With the tax, supply is SSand equilibrium is P1Q1but who pays the tax?3.39CArea C is awelfare lo

29、ss.BArea B is borne by producersAArea A is borne by consumersWho pays a commodity tax?DSSSQ1Q0P0P1SThe incidence of thetax depends upon theelasticities of demandand supply.Chapter 5The effect of price and incomeon demand quantitiesDavid Begg, Stanley Fischer and Rudiger Dornbusch, Economics, 6th Edi

30、tion, McGraw-Hill, 2000Power Point presentation by Peter Smith1.41The price elasticity of demandmeasures the sensitivity of the quantitydemanded of a good to a change in its priceIt is defined as:% change in quantity demanded% change in price1.42Elastic demandnELASTIC demandwhen the price elasticity

31、 is more negative than -1i.e. when the % change in quantity demanded exceeds the change in pricee.g. if quantity demanded falls by 7% in response to a 5% increase in priceelasticity is -7 5 = -1.41.43Inelastic demandnINELASTIC demandwhen the price elasticity lies between -1 and 0i.e. when the % chan

32、ge in quantity demanded is smaller than the change in pricee.g. if quantity demanded falls by 3.5% in response to a 5% increase in priceelasticity is - 3.5 5 = - 0.71.44Unit elastic demandnUNIT ELASTIC demandwhen the price elasticity is exactly -1i.e. when the % change in quantity demanded is equal

33、to the change in pricee.g. if quantity demanded falls by 5% in response to a 5% increase in priceelasticity is - 5 5 = - 11.45Price elasticity for a linear demand curveThe price elasticity varies along the length of a straight-line demand curve.DemandUnit elasticityElasticInelasticQuantityPrice1.46W

34、hat determines the price elasticity?nThe ease with which consumers can substitute another good.nEXAMPLE:consumers can readily substitute one brand of detergent for another if the price risesso we expect demand to be elasticbut if all detergent prices rise, the consumer cannot switchso we expect dema

35、nd to be inelastic1.47Elasticity is higher in the long runnIn the short run, consumers may not be able (or ready) to adjust their pattern of expenditure.nIf price changes persist, consumers are more likely to adjust.nDemand thus tends to bemore elastic in the long runbut relatively inelastic in the

36、short run.1.48Elasticity and revenueWhen price is changed, the impact on a firms total revenue (TR) will depend upon the price elasticity of demand.For a priceincreaseFor a pricedecreaseDemand iselasticTRdecreasesTRincreasesDemand isunit elasticTR doesnot changeTR doesnot changeDemand isinelasticTRi

37、ncreasesTRdecreases1.49Elasticity and tube faresnPassengers can use buses, taxis, cars etcso demand may be elastic (e.g. - 1.4)and an increase in fares will reduce the number of journeys demanded and total spendingnIf passengers do not have travel optionsdemand may be inelastic (e.g. - 0.7)so raisin

38、g fares will have less effect on journeys demandedand revenue will improveHow should tube fares be changed to increase revenues?1.50The cross price elasticity of demandThe cross price elasticity of demand for good iwith respect to the price of good j is :% change in quantity demanded of good i % cha

39、nge in the price of good jThis may be positive or negativeThe cross price elasticity tends to be negative if two goods are substitutes: e.g. tea and coffeeThe cross price elasticity tends to be positiveif two goods are complements e.g. tea and milk.1.51Price elasticities in the UKwith respect to a 1

40、%price change in:FoodClothingTransportPercentage change inthe quantity demanded ofFoodClothing and footwearTravel and communications00.10.10.30.40.50.50.10.11.52The income elasticity of demandThe income elasticity of demand measuresthe sensitivity of quantity demanded to a change in income:% change

41、in quantity demanded of a good% change in consumer incomeThe income elasticity may be positive or negative.1.53Normal and inferior goodsnA NORMAL GOOD has a positive income elasticity of demandan increase in income leads to an increase in the quantity demandede.g. dairy producenAn INFERIOR GOOD has

42、a negative income elasticity of demandan increase in income leads to a fall in quantity demandede.g. coalnA LUXURY GOOD has an income elasticity of demand greater than 1e.g. wine1.54Income and the demand curveFor an increase in income:QuantityPriceD0NORMAL GOODINFERIOR GOODQuantityD0PriceD1Demand cu

43、rvemoves to the rightD1Demand curve moves to the leftChapter 6The theory of consumer choiceDavid Begg, Stanley Fischer and Rudiger Dornbusch, Economics, 6th Edition, McGraw-Hill, 2000Power Point presentation by Peter Smith1.56Four key elements in consumer choicenConsumers incomenPrices of goodsnCons

44、umer preferencesnThe assumption that consumers maximize utility6.57The budget linenIncome and prices together determine the combinations of the goods that the consumer can afford.nThe budget line separates the affordable from the unaffordable.Consider a student with abudget of 50 to spend on meals a

45、nd films.01234560246810 12MealsFilmsABCDEFGPrice of meals is 5;price of films is 10.3.58Modelling consumer preferencesnAssume the consumer prefers more to less.nCompared with point “a”:the consumer would prefer to be to the north-east e.g. at “c”but prefers “a” to such points as “b” to the south-wes

46、t.Quantityof mealsQuantity of filmsabc3.59Modelling consumer preferences (2)n“a” is preferred to all points in the dominated regionnbut the consumer would prefer any point in the preferred region to “a”npoints like “d” and “e” involve more of one good and less of the other compared with “a”.Quantity

47、of mealsQuantity of filmsabcPreferredregionDominatedregioned3.60nAn indifference curve like U2U2 shows all the consumption bundles that yield the same utility to the consumerICs slope downwards (given our assumptions)their slope gets steadily flatter to the rightICs cannot intersectModelling consume

48、r preferences (3)Quantityof mealsQuantity of filmsU2U23.61The consumers choicenThe choice point is at Cnwhere the budget line is at a tangent to an ICnPoints B and E are also affordablenbut give lower utility,nbeing on a lower IC.U3Quantityof mealsQuantity of filmsU2U2U1U3U1BLCEBThe point at which u

49、tility is maximized is found by bringing together the ICs and the budget line1.62Adjustment to an income changenA change in the consumers income shifts the budget linenwithout changing the slopenthe change in the pattern of consumer choice depends on the nature of the two goods1.63Normal goodsWhen b

50、oth goods areNORMAL, an increasein income induces a newchoice point at C:The quantity demanded of each good increasesMealsFilmsBL0BL1U2U2U1U1CC1.64An inferior good and a normal goodWhen “meals” is an inferior goodthe increase in income takes theconsumer from C to C.The quantity of meals fallsand the