中級(jí)微觀經(jīng)濟(jì)學(xué)

1、Chapter TwoBudgetary and Other Constraints on ChoiceChapter 2: Budget1Consumption Choice SetsA consumption choice set is the collection of all consumption choices available to the consumer.What constrains consumption choice?Budgetary, time and other resource limitations.Chapter 2: Budget2Budget Cons

2、traintsA consumption bundle containing x1 units of commodity 1, x2 units of commodity 2 and so on up to xn units of commodity n is denoted by the vector (x1, x2, , xn).Commodity prices are p1, p2, , pn.m is the consumers (disposable) e.Chapter 2: Budget3Budget ConstraintsThe consumers budget set is

3、the set of all affordable bundles;B(p1, , pn, m) = (x1, , xn) | x1 0, , xn 0 and p1x1 + + pnxn m The budget constraint is the upper boundary of the budget set.Chapter 2: Budget4Budget Set and Constraint for Two CommoditiesChapter 2: Budget5x2x1Budget constraint isp1x1 + p2x2 = m.m /p1AffordableJust

4、affordableNot affordablem /p2Budget Set and Constraint for Two CommoditiesChapter 2: Budget6x2x1Budget constraint isp1x1 + p2x2 = m.m /p1BudgetSet the collection of all affordable bundles.m /p2Budget Set for Three CommoditiesChapter 2: Budget7x2x1x3m /p2m /p1m /p3 (x1,x2,x3) | x1 0, x2 0, x3 0 and p

5、1x1 + p2x2 + p3x3 mBudget ConstraintsTwo goods are often general enough.Good 2 represents a composite good that stands for everything else the consumer might want to consume other than good 1.Think of good 2 as being the dollars that the consumer can use to spend on other goods. p1x1 + x2 mChapter 2

6、: Budget8Budget ConstraintsFor n = 2 and x1 on the horizontal axis, the constraints slope is -p1/p2. What does it mean?Increasing x1 by 1 must reduce x2 by p1/p2.Chapter 2: Budget9 x2 = -(p1/p2)x1 + m/p2Budget ConstraintsChapter 2: Budget10 x2x1Slope is -p1/p2+1-p1/p2Budget ConstraintsChapter 2: Bud

7、get11x2x1+1-p1/p2Opp. cost of an extra unit of commodity 1 is p1/p2 units foregone of commodity 2.Budget ConstraintsChapter 2: Budget12x2x1Opp. cost of an extra unit of commodity 1 is p1/p2 units foregone of commodity 2. And the opp. cost of an extra unit of commodity 2 is p2/p1 units foregone of co

8、mmodity 1. -p2/p1+1How do budget Sets & Constraints change? e changePrice changeUniform value sales taxesFood stamp programQuantity discount /penaltyChapter 2: Budget13How do the budget set and budget constraint change as e m increases?Chapter 2: Budget14Originalbudget setx2x1Higher e gives more cho

9、iceChapter 2: Budget15Originalbudget setNew affordable consumptionchoicesx2x1Original andnew budgetconstraints areparallel (sameslope).How do the budget set and budget constraint change as e m decreases?Chapter 2: Budget16Originalbudget setx2x1How do the budget set and budget constraint change as e

10、m decreases?Chapter 2: Budget17x2x1New, smallerbudget setConsumption bundlesthat are no longeraffordable.Old and newconstraintsare parallel.Budget Constraints - e ChangesIncreases in e m shift the constraint outward in a parallel manner, thereby enlarging the budget set and improving choice.Decrease

11、s in e m shift the constraint inward in a parallel manner, thereby shrinking the budget set and reducing choice.Chapter 2: Budget18Budget Constraints - e ChangesNo original choice is lost and new choices are added when e increases, so higher e cannot make a consumer worse off.An e decrease may (typi

12、cally will) make the consumer worse off.Chapter 2: Budget19Budget Constraints - Price ChangesWhat happens if just one price decreases?Suppose p1 decreases.Chapter 2: Budget20How do the budget set and budget constraint change as p1 decreases from p1 to p1”?Chapter 2: Budget21Originalbudget setx2x1m/p

13、2m/p1m/p1”New affordable choicesBudget constraint pivots; slope flattens from -p1/p2 to -p1”/p2-p1/p2-p1”/p2Budget Constraints - Price ChangesReducing the price of one commodity pivots the constraint outward. No old choice is lost and new choices are added, so reducing one price cannot make the cons

14、umer worse off.Chapter 2: Budget22Budget Constraints - Price ChangesSimilarly, increasing one price pivots the constraint inwards, reduces choice and may (typically will) make the consumer worse off.Chapter 2: Budget23Uniform Value Taxes (ad valorem sales tax )An value tax levied at a rate of 5% inc

15、reases all prices by 5%, from p to (1+0.05)p = 1.05p.An value tax levied at a rate of t increases all prices by tp from p to (1+t)p.A value tax is applied uniformly to all commodities.Chapter 2: Budget24Uniform Value TaxesA uniform value sales tax levied at rate t changes the constraint from p1x1 +

16、p2x2 = mto (1+t)p1x1 + (1+t)p2x2 = mi.e. p1x1 + p2x2 = m/(1+t).Chapter 2: Budget25Uniform Value Sales TaxesChapter 2: Budget26x2x1p1x1 + p2x2 = mUniform Value Sales TaxesChapter 2: Budget27x2x1p1x1 + p2x2 = mp1x1 + p2x2 = m/(1+t)Uniform Ad Valorem Sales TaxesChapter 2: Budget28x2x1Equivalent e lossi

17、sUniform Value Sales TaxesChapter 2: Budget29x2x1A uniform value sales tax levied at rate tis equivalent to an etax levied at rateThe Food Stamp ProgramFood stamps are coupons that can be legally exchanged only for food.How does a commodity-specific gift such as a food stamp alter a familys budget c

18、onstraint?Chapter 2: Budget30The Food Stamp ProgramSuppose m = $100, pF = $1 and the price of “other goods” is pG = $1.The budget constraint is then F + G =100.Suppose that 40 food stamps are issued. What are the budget set and constraint without and with black markets?Chapter 2: Budget31The Food St

19、amp ProgramChapter 2: Budget32GF100100F + G = 100: before stamps.The Food Stamp ProgramChapter 2: Budget33GF100100F + G = 100: before stamps.Budget set after 40 foodstamps issued.140The familys budgetset is enlarged.40The Food Stamp ProgramWhat if food stamps can be traded on a black market for $0.5

20、0 each?Chapter 2: Budget34The Food Stamp ProgramChapter 2: Budget35GF100100F + G = 100: before stamps.Budget constraint after 40 food stamps issued.140120Black market trading makes the budget set larger again.40Budget Constraints - Relative Prices“Numeraire” means “unit of account”.Suppose prices an

21、d e are measured in dollars. Say p1=$2, p2=$3, m = $12. Then the constraint is 2x1 + 3x2 = 12.Chapter 2: Budget36Budget Constraints - Relative PricesIf prices and e are measured in cents, then p1=200, p2=300, m=1200 and the constraint is 200 x1 + 300 x2 = 1200,the same as 2x1 + 3x2 = 12.Changing the

22、 numeraire changes neither the budget constraint nor the budget set.Chapter 2: Budget37Budget Constraints - Relative PricesThe constraint for p1=2, p2=3, m=12 2x1 + 3x2 = 12 is also 1x1 + (3/2)x2 = 6,the constraint for p1=1, p2=3/2, m=6. Setting p1=1 makes commodity 1 the numeraire and defines all p

23、rices relative to p1; e.g. 3/2 is the price of commodity 2 relative to the price of commodity 1. Chapter 2: Budget38Budget Constraints - Relative PricesAny commodity can be chosen as the numeraire without changing the budget set or the budget constraint.Chapter 2: Budget39Budget Constraints - Relati

24、ve Pricesp1=2, p2=3 and p3=6 price of commodity 2 relative to commodity 1 is 3/2,price of commodity 3 relative to commodity 1 is 3.Relative prices are the rates of exchange of commodities 2 and 3 for units of commodity 1.Chapter 2: Budget40Shapes of Budget ConstraintsQ: What makes a budget constraint a straight line?A: A straight line has a co