Principles of

Microeconomics6th edition

N. Gregory Mankiw
Harvard University

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1
economy oikonomos

scarcity

Economics

Ten principles of Economics

scarcity

Economics

1.1

1People face trade-offs

There aint no such thing as a free

lunch

trade-offs

efficiency

equality

aint=is notno

There
is no such thing as a free lunch.

trade-off

trade off

3 trade-off

(efficiency)

(equality)

2The cost of something

is what you give up to get it

opportunity cost


opportunity cost

3Rational people think at the margin

rational people

24

marginal change

marginedge

marginal benefits

marginal costs

200
100,000 500 =100,000/200

500
think at the margin
10 300

average cost 500

marginal cost

rational
people:

marginal
change:

4People respond to incentives

incentive

50
1960 Ralph Nader

.Sam
Peltzman, 1975

incentive

2005 2008
2 4

A320 737

40%

Demetrius Stroud

.Christy LaBadie
30 4

Diddy
hip-hop
20

2008

10

2004
11 23
Ryan Johnson
David Reiley
Juan Carlos Munoz

95%

Austan Goolsbee Slate.com, 2006 3 16.

1.2

5Trade can make everyone better off

6Markets are usually a good way to

organize economic activity
1980 20

market economy

self-interest

well-being

self-interested
self-interested

well-being

10


decentralized

.Adam Smith,1776

invisible hand

market
economy:

.
.

.

1776
1776

11

7Governments

can sometimes improve market

outcomes

property rights

12

 DVD

market failure

externality

market power

willingness to pay

welfare system

property
rights:

market
failure:

externality:

market
power

13

1.3

8
(A countrys standard of living depends on its ability to produce goods and services)
2008 47,000
10,000 1,400

2%

35 20 8

productivity

20

1970 1980

14

productivity

CEO

...
unintended consequences

broken window fallacy

15


...

...

90% 3%

...

Robert D. Mcteer, JR. The Wall Street Journal, June 4,2003.

9(Prices rise when the government

prints too much money)
1921 1 0.3 1922 11
70,000,000

inflation
1920
1970 .
21 2.5%
30

1920

1970

inflation

Luddite19
.Ned Lud
16

 10Society

faces a short-run

trade-off between inflation and unemployment

1980 1990

business cycle

.2008 2009

business
cycle:

17

1.4

1
1

1.
2.
3.
4.

5.
6.
7.

8.
9.
10.

18

1.

2.

3.

4.

5.
www.cengage.com/economics/mankiw.
6.

7.

8.

9.

19

scarcity economics efficiency equality

opportunity cost rational people marginal change
incentive market economy property rights
market failure

externality

market power

productivity inflation
business cycle

1.
2.
3.
4.
5.
6.
7.
8.
9.
10.

20

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

caoqianseu@163.com)

caoqianseu@163.com

2.1

scientific method

caoqianseu@163.com

2.1.1
Isaac Newton 17

2.1.2 the role of assumptions

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2.1.3

beachball

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2.1.4

circular-flow diagram

factors

of production

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 1 loops

circular-flow diagram:

2.1.5

production possibilities frontier

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1000 0 3000
0

600 2200 A
700 2000 B

C
C

efficient
A
D

inefficient
D
300 1000
D A 300 600
1000 2200

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 A B 100
200
:

A B 200 100
A 100 200

2
E
F

A G

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3 A
1000
3
3
A
G 2200 2300
600
650

production
possibilities frontier

2.1.6

microeconomics

macroeconomics

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microeconomics:

macroeconomics

George H. W. Bush

Michael Kinsley

Donald Trump

Ben Stein

Meg Whitman eBay CEO

Cate Blanchett

Danny Glover

Anthony Zinni

Barbara Boxer U.S.

Steve Ballmer CEO

John Elway

Arnold Schwarzenegger

Kofi Annan

Sandra Day-OConnor

Ted TurnerCNN

Scott AdamsDilbert

Lionel Richie

Mick Jagger

10

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 Mick Jagger

Mick Jagger
Keith Richard

2.2

2.2.1

Polly:
Norm:

positive statementsdescriptive

normative statementsprescriptive

11

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set of
beliefs

positive
statements:

normative
statements:

2.2.2
.one-armed
On the one handOn the other hand,

1946

12

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..John Maynard Keynes

1935

..
Larry Summers

21
.Joseph Schumpeter

13

caoqianseu@163.com


19
20

20
21

Lawrence H. Summers

The White House Blog, September 21, 2009.

http://www.whitehouse.gov/blog/A-Vision-for-Innovation-Growth-and-Quality-Jobs/

2.2.3

14

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2.3
George
Bernard Shaw
Ronald Reagan
Trivial Pursuit 100

3000

2.3.1

Trivial Pursuit

100 100 3000

15

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2.3.2

100,000 10,000 10%

20,000 4,000 20%

2.3.4

1 20

16

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1.93%
2.
93%
3.
90%
4./
90%
5.90%

6.
88%
7.
85%
8.85%
9.
85%
10.

85%
11. 50
85%
12.
84%
13.83%
14.
83%
15.83%
16.
82%
17.79%
18.79%
19.78%
20.78%

17

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Richard M. Alston, J. R. Kearl, and Michael B. Vaughn, Is There Consensus among Economists in the
1990s? American Economic Review (May 1992): 203209; Dan Fuller and Doris Geide-Stevenson, Consensus
among Economists Revisited, Journal of Economics Education (Fall 2003): 369387; Robert Whaples, Do
Economists Agree on Anything? Yes! Economists Voice (November 2006): 16; Robert Whaples, The Policy
Views of American Economic Association Members: The Results of a New Survey, Econ Journal Watch
(September 2009): 337348.

2.4

think tanks

18

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 intellectual
framework
,
.Lawrence Goulder

2004 164 2005 36%

4
Environmental Defense
8

.Caroline
Alkine 1991

1960
1980
1990

1980

1990
.Kert Davies
1990

Jessica E. VascellaroThe Wall Street Journal, August 23, 2005.

19

caoqianseu@163.com

 A
A.1

A.2
A-1 a

pie chart

A-1

a 2008 b
2008 c
1950 2000
b

bar graph
c

time-series graph

20

caoqianseu@163.com

A.3
A-1

coordinate system

grade point average

ordered pair
Albert E.25 /3.5
Alfred E. 5 /2.0

x-coordinate

y-coordinate

x y

origin
x y
2

scatterplot

A-2

Alfred E. Neuman Madwhat, me

worry?
21

caoqianseu@163.com

 A-2

positive correlation

negative correlation

A.4

A-2

demand curve

A-1Emma

A-1

A-3 A-4

A-1
22

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3 x y
A-1
5 10
9 9
A-3

negatively related

A-3

D1

4
A-1
D2D1
A-4

shifts
2
D3

23

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movements along a curve

shifts of a curve A-3 3

8 13 7 17

8 4 13
16

A-4

A-4

D1
3 4
D2 2 D3

x
y

x y

x y

24

caoqianseu@163.com

A.5
A-5

slope

A-5
21
6

13 8 x y

y -2 x +8-1/4

y
,
x

delta
y

y x
y

25

caoqianseu@163.com


3
6 21 8 13

y
68
2
1
=
=
=
x 21 13
8
4

A-5
-1/4

A.6

cause

omitted variable

reverse causality A B
B A

Big Brother

26

caoqianseu@163.com


A-6

A-6

A-6
A-6

A-7

controlled experiment

A-7
27

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A-7

minivans

28

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circular-flow diagram production possibilities frontier

microeconomics macroeconomics positive
statementsnormative statements

1.
2.
3.
4.
5.
6.

7.
8.
9.
10.

29

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1.
a.Selena 1
b.Stuart 4.50
c.Shanna 30
d.Sally 10% 10,000
2.
a.

b.
c.

d.

peace dividend
3. 1

4.LarryMoeCurly

10 1 1
1 2 2 1
a. ABCD
!

(D)

b.a AB
C D
c.
d. a
5.
a.
b.
c.
30

caoqianseu@163.com

d.
e.
6.
a.
b.
c.
d.
e.
7.

31

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Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

caoqianseu@163.com)

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3.1

caoqianseu@163.com

3.1.1
8

1 Farmer
15 60 Rancher
10 20 1
a

1
aproduction opportunities
bc

bc 8

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b 8
32 0
8 0 8
8
4 16
4 b
b 2

b
1 1
1 4

c 8
48 0 8
0 24 8
4 24 12 c

consumption possibilities frontier

b
c

1 A B 16 4
24 12

3.1.2
Rancher B
Farmer

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 32 15 5
17 5 16 4
[
2 a]

6 2
18 12 5 15
13 27 12 24
[b]

2
sets
of consumption opportunities

A* A a

B* B

[c]
5

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.
.

3.2

3.2.1

absolute

advantage

20 60 10
15

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absolute
advantage

3.2.2

1
opportunity cost
8

1 a 1
10 10 10
1 20 10 1/2
1 1/2
1 15 1
60 15 1/4 1
1/4

1
1
1 1/2 1
2 1 1/4 1
4

comparative advantage
X X
X
1 1/4
1/2
1 2 4
7

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opportunity
cost:

comparative advantage:

3.2.3

40 44 16 18

15 5
3
1 4

5 15
1/3 1
1/2

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3.2.4

3 1
1 2 1
4
2 4
2
4 2

2 4

.
10
1

Friday
30 2

.
..
.

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 1776

.
1817

..

3.3

3.3.1 .
.Tom Brady

2 2 20,000
.Forrest Gump 4
4 40

20,000 40

10

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40 20,000

3.3.2

imports
exports

2 1

1 2 1

1 1 1/2

imports

exports

11

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3.4

gold famers
12

12 7 23
wandering 250

12

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avatars
27 20

40% 50%

David Barboza

: New York Times, December 9, 2005.

absolute advantage opportunity costcomparative

advantage,imports exports

1.
13

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2.
3.
4. 3
5.

6.

7.

1.Maria 1 20 1 50
5
a.
b. 100
2. 4 10
5 1
a. 1
b.
c. 1 1 1

d.
e.
f.

g.
3.(Pat)(Kris)
root beer
4
2 6 4
a.

b.
c.

4. 1000 2 30
14

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a. 1 1

b. 1000

c. 1000 20
1000

5. 50 1
40 2
a.
b.

c. 1

6.Baseballia

a.

b.
c.
d.
7. 100 20
100 10
a.

b.

c.

d. 100 20

8. 20 60
50 75

15

caoqianseu@163.com

a.
b.
c.
d. 2 1

9.
a.

b.

c.
d.
e.
10.

11. 1 1
1 2 3 10
a.
b.
c.
d.

e.

f.(c)(d)(e)

16

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17

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Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

caoqianseu@163.com)

caoqianseu@163.com

4.

4.1

4.1.1

market

market:

caoqianseu@163.com

4.1.2

competitive

market

perfectly competitive
:1

price taker

monopoly

competitive
market:

caoqianseu@163.com

4.2

4.2.1

quantity demanded

20
0.20

law of demand

1 Catherine
12 0.50 10
3 0
demand

schedule

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demand curve

quantity
demanded:

law
of demand:

demand
schedule:

demand
curve:

4.2.2
1

market demand
2

2
Catherine 4 Nicholas 3
7
2

caoqianseu@163.com

4.2.3

increase

in demand

decrease in demand

normal good

inferior good

caoqianseu@163.com

substitutes
DVD

complements

tastes

2
7

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4 a

a D1 D2 2
20 10 A B

b 2 4
20 12 A C

shift

shift
move

move
8

caoqianseu@163.com

4 b

10% 4%
10% 12%

(normal
good):

inferior
good:
,

substitutes:
,

complements:
,

4.3

4.3.1

quantity supplied

law of supply
9

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5 Ben
1

supply schedule

supply curve

quantity
supplied:

law
of supply:

supply
schedule:

supply

curve:

10

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4.3.2
6

2
Ben 3 Jerry 4
7

4.3.3

11

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increase in supply

decrease in

supply

12

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4.4

4.4.1
8

equilibrium
equilibrium price

equilibrium quantity 2
7

market-clearing price

13

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2 7
7

9
a2.50

10 4
b1.50
10 4

14

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 9 (a) 2.50
10 4
surplus:

excess supply

9 b
1.50
shortage:

excess
demand

law of supply and demand:

equilibrium:

equilibrium
price:

equilibrium
quantity:

surplus:

shortage:

law
of supply and demand:

15

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4.4.2

1.
2.
3.

1.taste

2. 10
D1 D2

3.2
10 2 2.50 7 10

16

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 10

D1 D2 2 2.50
7 10

a shift in the supply curve

a movement along a fixed supply
curve

17

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11

S1 S2 2
2.50 7 4
1.

2.
11 S1 S2
3.2
11 2 2.50 7
4

1.
18

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2. 12
3. 12
a
b

12

a P1 P2 Q1 Q2b
P1 P2 Q1 Q2

P
Q

P Q

P Q

P Q

P Q

P Q

P Q

P Q

P Q

P Q

19

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competing uses

decentralized system

20

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2010

price gouging

.Martha Coakley

.Deval Patrik

2004 Charley

A
0.69 B 2.99
A
0.69 A
B

21

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.
Polar Beverages

Jeff JacobySource: The Boston Globe, May 4, 2010.

22

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market competitive market; quantity demanded;

law of demand; demand curve; normal good;
inferior good
substitutes; complements
quantity supplied; law of supply; supply schedule;
supply curve equilibrium; equilibrium price
equilibrium quantity;

surplus; shortage; law

of supply and demand

1.
2.
3.tastes

4.Popeye

5.
6.

7.
8.

9.

23

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1.
a.

b.

c.
2.

3. minivans

a.
b.
c.
d.sports utility vehicles, SUVs
e.
4. DVD
a.
DVD
DVD

b.
c. DVD
5. 30

6.
a.
b.
c.
d.
7.

24

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a.
b.
8. 2015 2020 2030
5 15
9.

10.

135

26

104

53

81

81

68

98

53

110

39

121

a.
b.
c.
11.

12.bagels
a.

b.

13. :

10,000

8,000

8,000

8,000

12

6,000

8,000

16

4,000

8,000

20

2,000

8,000

25

caoqianseu@163.com

a.

b.
c. 5,000

4,000

3,000

12

2,000

16

1,000

20

14. QD=1,600-300P QD
P QS=1,400+700P QS

26

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27

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Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

caoqianseu@163.com)

caoqianseu@163.com

elasticity

10% 2.5%
6%.

5.1
4

5.1.1

price of

elasticity of demand

elastic

inelastic

elastic inelastic

caoqianseu@163.com

rules-of-thumb

butter
(margarine)

necessities(luxuries)

elasticity:

price elasticity of demand:

1 1

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5.1.2

10% 20%

=20%/10%=2.
2 2

10%

20%

5.1.3

A B B A
A 4

120

B 6

80

A B 50%=6-4/4 33%=80-120
/120
33/50 0.66 B A 33%=4-6/6
50%=120-80/80

midpoint method

P Q

P Q

Q / Q Q P

=
P / P P Q

( P, Q )

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4 6 5
4 6 40%6-4/5=40% 6
4 40%

A B
=5

=100

A B 40% 40%
B A 40% 40%
1.
(Q1 , P1 ) (Q2 , P2 )

(Q2 Q1 ) /[(Q2 + Q1 ) / 2]
( P2 P1 ) /[( P2 + P1 ) / 2]

5.1.4
1

elastic 1

inelastic 1

unit elasticity

1
a

perfectly inelastic

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perfectly elastic

inelastic
Inelastic II 1
6

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0.1
0.2
0.5
0.7
1.6
2.3
4.4

5.1.5
total
revenue
P Q 2
P Q P Q 2
P = 4 Q = 100 = 4 100 = 400

3 a
P P Q Q Q
( P P) Q A

P (Q Q) B

A B
7

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 4 5 100
90 400 450

P Q 2 4 100 400

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P P Q Q Q
( P P) Q A

P (Q Q) B

A B
4 5 100
90 400 450

3 b

B A 4
5 100 70 400 350
3
!

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a
b

total revenue:

5.1.6
4

1 2

1 2 5
9

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 6 3 4

5.1.7

income elasticity of demand

Q / Q Q P
=

P / P P Q
Q / P
P / Q
P / Q

= AP
10

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normal goods

inferior goods:

necessities

luxuries

cross-price elasticity of demand 1

2 1
2

income elasticity of demand

cross-price elasticity of demand

11

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5.2
4

5.2.1

price elasticity of supply

elastic

inelastic

price elasticity of supply:

5.2.2

12

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2.85 3.15 9,000

10,000

=3.15-2.85/3=10%;
=11000-9000/10000=20%.

=20%/10%=2.
2 2
1% 2%.

5.2.3

5
0a

perfectly

inelastic
e

perfectly elastic

6 3 4 100
200 29% 67%

13

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 1 12 15
500 525 22% 5%
1.

14

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3 4
100 200. 29% 67%

12 15 500 525
22% 5%

5.3

OPEC

5.3.1

15

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20%.

7 S1 S2
100 110 3 2

S1 S2

3 2
100 110 40% 9.5%
300 =3100 220 =2110

P Q
Q
P

7
16

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 300 220

1950 1000
17%. 300 2%.
70%
1950

5.3.2 OPEC
1970
OPEC
1973 1974
50%. OPEC 1979 1981

17

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 OPEC 1982 1985

10%OPEC 1986 OPEC
45%1990 1970
1990 21
OPEC
21
2008-2009

OPEC 1970 1980

8 a
S1 S2 P1 P2

a S1 S2
b
S1 S2

OPEC

8 b
S1 S2
b

18

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 OPEC OPEC
OPEC
OPEC

OPEC

5.3.3

S1 S2a

D1 D2b

19

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9 a S1 S2
P1 P2 Q1 Q2

9 b D1 D2
Q1 Q2 P1 P2

5.4

4 5

20

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1
1

1
1

elasticity; price elasticity of demand; total revenue

income elasticity of demand cross-price
elasticity of demand; price elasticity of supply

21

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1.
2.
3.
4. 1 0

5.
6.
7.
8.
9.
10.
11.

1.
a.
b.
c.
d.root beer
2.

150

2,100

1,000

200

2,000

800

250

1,900

600

300

1,800

400

a. 200 250

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Principles of
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Harvard University

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Principles of
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Harvard University

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Harvard University

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30%

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14

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Harvard University

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New York Times, January 16, 2008

9.3.2

national security

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1960

Thinkpad

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1990

16

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1990 GDP 2.5% 2006
6%

1990 25%
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New York Times, December 28, 2007.

9.3.3

2002

20

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9.3.4

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GATT
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1995 2009
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26% 50%

20

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world

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Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

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10.1.1
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1
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QMARKET

10.1.2

social costprivate cost

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750
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externality;

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Principles of
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Harvard University

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Principles of
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3,518

11,441

100

42009
Source: Economic Report of the President, 2010, Table b-81.

2001 17% 2009 19%

4
(Temporary Assistance for Needy Families,
TANF)

2006 2009 13% 15%

4
Medicaid
6

caoqianseu@163.com


5%

2 4 14,130

budget deficit

budget surplus

budget deficit

budget surplus:

2009 14,310 2007 8

GDP
GDP

1950 65 13 16
17 20 1950
3 2

caoqianseu@163.com

 2 a
1950 working-age population 14%
21%50 40%
1950 7 2050 2.5

a 65 20-64

b
GDP

congressional budget office.

2010

2 b GDP
1950 1% 10%

caoqianseu@163.com


GDP
1
GDP 10% GDP 30%
1/3

12.1.2
40%

5 2007 23,290
7,574

10

439

1,426

19

383

1,246

16

289

941

12

61

197

468

1,521

20

690

2,244

30

2,329

7,574

100

5 2007
Source: Economic Report of the President, 2010, Table b-86.

caoqianseu@163.com

sales taxes

property
taxes
1/3

6 2007

10

777

2,526

34

389

1,266

17

145

471

955

3,105

42

2,265

7,367

100

6 2007
Source: Economic Report of the President, 2010, Table b-86.

2007
1/3

10

caoqianseu@163.com

12.2

deadweight loss

administrative burdens

12.2.1

Joe 8
Jane 6

11

caoqianseu@163.com

 5
3 1 4
2 7

2 3 4 1

3 2
1
2

1 1
0

25 1000 8%
65 21,720

25% 6%=8%75% 6%
40 10,290

the basis of taxation

consumption

8% 1000 10001+0.08
=1080 10001+0.082 40 10001+0.0840=21720

12

caoqianseu@163.com

tax

401K

Value-Added
Tax, VAT

2005
Alan Greenspan

2010 1
2011 1 1
2009

2010 1 1

Joshua Rubenstein

401K 401K 1978 401 K

401K

13

caoqianseu@163.com

5,500 15

2001

2010

2011

Andrew

Katzenstein

1 1

2010

Laura Saunders

Wall Street Journal, December 30, 2009

12.2.2
4 15

14

caoqianseu@163.com

12.2.3

average tax rate

marginal

tax rate
50,000 20%
50,000 50% 60,000
15,000 50,00020%+60,000-50,00050%=15,000

25%=15,000/60,000
50%

50% 0.50

average tax rate:

marginal tax rate:

40,000 40,001
50,000
20% 20% 50000
40%

15

caoqianseu@163.com

12.2.4
4000
4000

lump-sum tax

4000 20,000 20% 40,000

10%

lump-sum tax:

12.3

.Russell Long
//

16

caoqianseu@163.com

12.3.1

benefits principle

11

benefits principle:

12.3.2

ability-to-pay principle

equal sacrifice
1000 10,000

17

caoqianseu@163.com


vertical

equity

horizontal equity

7
7

proportional

regressive

progressive

18

caoqianseu@163.com

quintiles 8
1%

8 congressional budget office. 2006 .

8 2 1/5 17,200
1/5 248,400 1% 170
8 3
1/5 4.3% 1/5
1% 25.8% 31.2%.
4 5 1/5 3.9%
0.8% 1/5 55.7% 69.3%
1% 100
18.8% 28.3%

1/4

1/5 4.3%

30%

19

caoqianseu@163.com

 30%

SmithJones 10
4 4
6

12.3.3

flypaper theory

20

caoqianseu@163.com

ability-to-pay principle:

vertical equity:
horizontal equity:
proportional tax:

regressive tax:

progressive tax:

21

caoqianseu@163.com

2010

.A. Paul A. Volcker

3 1

1+1+1=3
3

10%

0.30

10% 1.10

2.20 3.30

10%

22

caoqianseu@163.com

25

Edward C. Prescott

.C.

flat tax

.E. Robert E. Hall .

Alvin Rabushka 1981

flat taxproportional tax

23

caoqianseu@163.com

N. Gregory Mankiw

New York Times, April 30, 2010.

12.4

progressivity

1980
. 50%
70%

1981 1986
1989 28%
. 1992
1993
40%.W.
35%.
2008

24

caoqianseu@163.com

budget deficit; budget surplus; average tax rate;

marginal tax rate; lump-sum tax; benefits principle
ability-to-pay principle vertical equity
horizontal equity; proportional tax; regressive tax;
progressive tax

1. GDP
2.
3.
4.
5.
6.
7.
8.

1.
25

caoqianseu@163.com


http://www.cbo.gov
2.

http://www.gpo.gov
a. 1

b.

c.

3.

a.

b.

c.

d.a~c
4.
4%
15.3%

3
20,000
40,000

5.

6.

a.?

26

caoqianseu@163.com

b.

c.

7. 5% 6%
20%
8. 1986

9.
a.
b.
c.
10.
a. 7
50,000 100,000 200,000
7
b.
50,000 100,000 100,000
200,000

c.

11. 8
a.
b.
c. b

d.

27

caoqianseu@163.com

e.
12.
a. b. c.

28

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

13

caoqianseu@163.com)

caoqianseu@163.com

13

industrial organization

Delta

13.1

13.1.1

caoqianseu@163.com

total

revenue
total

cost
profit

=-

1
2 2

total revenue:
total cost:
profit:

13.1.2
1

1
1 1

explicit costs
implicit costs

100
100

caoqianseu@163.com

100 500

explicit costs:

implicit costs:

13.1.3

30
5% 1.5
1.5

1.5

30 10
20 5%
1
1.5
1 0.5

13.1.4

caoqianseu@163.com


economic
profit

accounting profit

economic profit:

accounting profit:

caoqianseu@163.com

.McDonald 20
10 100

200 .

13.2

13.2.1
1
0 0 1 50 2
90 2 a

production function

50

90

120

140

150

155

50
40
30
20
10
5

30

30

30

10

40

30

20

50

30

30

60

30

40

70

30

50

80

30

60

90

1:

caoqianseu@163.com

b 1 marginal
product 1
2 50 90 40
2 3 90 120 30
1

a
1 1

1 1

40
30 20
diminishing marginal product

caoqianseu@163.com

marginal product:

diminishing marginal product:

13.2.2
1
30 10 1 40
2 50 1

1
2 b

total-cost curve
ba

Jones
1 3 2 5
3 6 100

caoqianseu@163.com

13.3

2
Conrad

2.

2
0~10
3 2
2

caoqianseu@163.com

2 2

13.3.1

fixed costs

2 3
variable costs

2 0
0 1 0.30 2 0.80
2

fixed costs:
variable costs:

10

caoqianseu@163.com

13.3.2

3.80 1.90 =3.80/2

(
)
average total cost

average
fixed cost
average variable cost

2
marginal cost 2 3
3.80 4.50 4.50 3.80 0.70
2

=/

ATC=TC/Q

=/

MC = TC / Q .

delta

average total cost:

average fixed cost:
11

caoqianseu@163.com

average variable cost:

marginal cost:

13.3.3

2
4 4 4
ATC
AFCAVC
MC

ATCAFCAVCMC
2
1
2 U 3

12

caoqianseu@163.com

U
U 4

1 2

5
1.30 6

tug of war U
U
efficient scale 5 6
1.30
1.30
1.30

4 2

13

caoqianseu@163.com

efficient scale:

13.3.4

5 ATCAFC
AVCMC

14

caoqianseu@163.com

4 22.5 5
25 5

13.4

15

caoqianseu@163.com

long-run
short-run 6

6 U
U
on or above

6
1000 1200
6

6 1000

16

caoqianseu@163.com

 1 1.2
1

13.4.2

economies of scale

diseconomies of
scale

constant returns to scale

specialization

coordination problems

1200 1

17

caoqianseu@163.com

9 900
10 950

Jack of all trades, master of none.

20 1

13.5

18

caoqianseu@163.com

FC

VC

TC=FC+VC

AFC=FC/Q

AVC=VC/Q

ATC=TC/Q

MC = TC / Q

19

caoqianseu@163.com


total

total

revenue;

explicit

marginal
fixed

implicit

costs;

accounting

profit;

product;

costs

profit;
economic

costs;

production

variable

fixed costs;

efficient

scale;

costs

marginal product;

average

average

economies

of scale;

profit

function;

diminishing

average

diseconomies

cost

total cost;

variable cost;

of scale;

constant

returns to scale.

1.
2.

3.
4.

5.
6.

7.
8.

20

caoqianseu@163.com

1.

a.

b.

c.

d.

f.

2. 50
5
a.
b. 51

3.

10

18

24

28

30

a.
b.
c. 10 5

4.Nimbus

----

20

50

90

----

21

caoqianseu@163.com

120

140

150

155

a.
b. 100 200

c. ATC=TC/Q
d. MC = TC / Q
e.
f.
5.

600

300

601

301

600
550
6.
=12

300

350

50

390

90

420

120

450

150

490

190

540

240

a.
b.

7. 200 0.50

22

caoqianseu@163.com

a.
b. 0 10 16

8.Vinnie 200

10

20

40

80

160

320

640

9.

a.
b.
10.
!

300

1
a.

b.

11.Jane

30

10

40

25

55

45

75

70

100

100

130

135

165

a.

23

caoqianseu@163.com

b.

12.

60

70

80

90

100

110

120

11

24

39

56

75

96

119

21

34

49

66

85

106

129

24

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Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

14

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caoqianseu@163.com

14
20%
20%

market power

14.1

14.1.1

perfectly competitive
competitive market
market
!

caoqianseu@163.com

price takers

14.1.2

Vaca
Q P PQ
6 1000 6000

2000 12,000

1
6 6
1

TR=PQ

AR=TR/Q

MR = TR / Q

12

18

24

30

36

42

48

caoqianseu@163.com

1
1
average revenue
1
6
PQ
Q

1 5
marginal revenue
1 6
PQP
Q P

competitive market:

average revenue:
marginal revenue:

14.2

caoqianseu@163.com

14.2.1
2 2
6
3
2

(Q)

(TR)

(TC)

(TR-TC)

MR = TR / Q

MC = TC / Q

MR-MC

-3

12

18

12

24

17

30

23

36

30

-1

42

38

-2

48

47

-3

2 0
3
1 1 2
4
4 5 7

2
6
2 4 -3 1

6 3 3 1 4

5 6 7
1 7 6 5

1
12 3

6,7 8

caoqianseu@163.com

14.2.2
1

MCATC U

ARMR

1
MC

ATCAC
P
MR

AR Q1 MR1 MC1
Q2 MC2 MR2
QMAX
1 Q1
1 MR1
MC1
Q1
Q2
1 MC2MR2
Q2
Q1
6

caoqianseu@163.com

 Q2
QMAX

1 QMAX

P1 P2

Q1 Q2

2
P1 Q1
P2 Q1
Q2

caoqianseu@163.com

14.2.3

shutdown

exit

sunk cost

TR VC

TR<VC .
Q
TR/Q < VC/Q .
TR/QPQ Q P
VC/Q AVC
P<AVC .

caoqianseu@163.com

AVCMC

14.2.4

,Dont cry over spilt milk

Let bygones be bygones

sunk cost

the irrelevance of sunk costs

15 10
20
15 10
10

sunk cost:

caoqianseu@163.com

miniature-golf course

14.2.5

TR TC

TR<TC .
Q
TR/Q < TC/Q .
TR/Q P TC/Q
ATC
P<ATC .

10

caoqianseu@163.com

P>ATC .

4.

ATCMC

14.2.6

TRTC
=TR-TC.
Q Q
=TR/Q TC/QQ.

TR/Q PTC/Q ATC

11

caoqianseu@163.com

=P-ATCQ.

5 a
P-ATC
QP-ATCQ

P-ATC Qa
b
5 b

ATC-P
QATC-PQ

14.3

12

caoqianseu@163.com

14.3.1
1000
6 a
1000

6 b 1000.

6
b

a
1000
1000.

14.3.2

13

caoqianseu@163.com

=P-ATCQ.

efficient scale

7 a P
MC ATC

a
b

7b
14

caoqianseu@163.com

14.3.3

100
5
3
8

14.3.4

8 a A
Q1 P1
D1
D2b A B Q1 Q2
P1 P2

S1 S2c
15

caoqianseu@163.com


C
P1
Q3

8
a
A

b D1
D2 A B P1 P2
Q1 Q2
S1 S2c
C
P1 Q3

16

caoqianseu@163.com

14.3.5

marginal firm

17

caoqianseu@163.com

14.4
1

18

caoqianseu@163.com


()competitive market; average revenue; marginal
revenue sunk cost

1.
2.
3.

4.
5.
6.
7.
8.

1.
a.
b.
2. 40

3.
27 280 30 10

19

caoqianseu@163.com


4.

10

11

13

19

27

37

16

24

32

40

48

56

a.
b.
2 3 2.5
a
c.
5..Ball Bearings

100

100

50

100

70

100

90

100

140

100

200

100

360

a.
b. 50 CEO

c.CFO CEO

6.
a.
b.

c.

20

caoqianseu@163.com


7. 500 10

8. 100
10 8 200
a.
b.
c.
d. 100
9.
a.
b.
c.

10. Ectenia

10

11

12

13

1200

1100

1000

900

800

700

600

500

400

300

200

100

10

12

a.1 6
b. 11

c.b
d.

11.
30
a.

21

caoqianseu@163.com

 25
b.

c.
12. 100 16

a.
b. 10
c.

d.
13. 1000
pretzel
U

a.
b. 800

c. 800

d. 800

22

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

15

caoqianseu@163.com)

caoqianseu@163.com

15
Windows

100

monopoly

price taker
(price
maker)

1994

Intuit
1998

caoqianseu@163.com

15.1

barriers to entry
monopoly

monopoly:

15.1.1
Old West

DeBeers

.Cecil Rhodes 1888

80% 100%

15.1.2
3

caoqianseu@163.com

20

15.1.3

natural monopoly
1

11

caoqianseu@163.com

15.2

caoqianseu@163.com

15.2.1

2 a

a
b

2 b

caoqianseu@163.com

15.2.2
1

1
1 1 10
2 9
3 8

total revenue

average revenue

marginal revenue

3 24 4
28 4 4 =28 24
1

caoqianseu@163.com


3 4

4 7

4 3 1
3 3 4 7 4 4

PQ
!

caoqianseu@163.com

15.2.3

4
3

4
A

B
Q1
1
9

caoqianseu@163.com


Q2
1

QMAX

P=MR=MC.
P>MR=MC.

4 B

15.2.4

TRTC

=TRTC.

=TR/QTC/QQ.
TR/Q PTC/Q ATC
=PATCQ.

10

caoqianseu@163.com

BCDE BC

DC
5 BCPATC

DC QMAX

11

caoqianseu@163.com

12

caoqianseu@163.com

fluoxetine
2001

Prozac

15.3

15.3.1
13

caoqianseu@163.com

14

caoqianseu@163.com

15

caoqianseu@163.com

15.3.2

16

caoqianseu@163.com

15.4

price discrimination

price discrimination:

15.4.1
Readalot
200

200

die-hard fans 10 30
40 5

30 10 5
50 30 300 =30
10 250 =550 100 =300

17

caoqianseu@163.com

 200 50 =250 -200

40 5
30 200

10
30 40 5
300 200 500
300 30 200

15.4.2

arbitrage

18

caoqianseu@163.com


30 40

15.4.3

perfect price discrimination

9
a

19

caoqianseu@163.com

15.4.4

0.50
0.50

20

caoqianseu@163.com

0.50 12 5
quantity discount

TKTS
.Hal Varian

2.5
1998 31% 24%

21

caoqianseu@163.com

two-for-one deals

TKTS

.Phillip LeslieRand
Journal of Economics2004

1996
14 17

40%
199

TKTS
TKTS 50%

1991 10% 2.5 3.5 10%

1.5 1990

Donald Trump TKTS

TKTS
TKTS

TKTS ticket boothsTKTS

TKTS
47 12 TKTS ticket

T-K-T-S

22

caoqianseu@163.com

Hal Varian; New York Times, January 13, 2005.

15.5

15.5.1

1994 Intuit

1890
1914

15.4.4
23

caoqianseu@163.com


1984 AT&T

synergies

120

.Lisa Richard

1980
24

caoqianseu@163.com



.W.

2008

.Christine Varney

White
& Case.Joseph Angland

2007 Leegin PSKS Leegin

Creative Leather Products v. PSKS

5:4 100
retail price maintenance

Herb Kohl

Arlen Specter
2007

.Bell Atlantic Corp. v. Twombly

AT&TProcter & Gamble Verizon

Leegin PSKS Leegin 2002

Leegin PSKS Leegin 20%Leegin PSKS
PSKS PSKS Leegin Leegin Leegin
Leegin 5:4

Twombly Bell Atlantic Twombly

2007

25

caoqianseu@163.com

Verizon .John
Thorne
test cases

1914 5

1914

30

(Jon Leibowitz)
Thomas Catan; The Wall Street Journal, January 31, 2010.

15.5.2

marginal-cost pricing
13
10

26

caoqianseu@163.com

deadweight loss

average-cost pricing

10

15.5.3
public ownership

27

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first-class mail

15.5.4

.George Stigler

market failure

15.6

13

28

caoqianseu@163.com

TaurusCamry
Ben & JerrysBreyers

15.2

P=MC

MR=MC

MR=P

MR<P

P=MC

P>MC

29

caoqianseu@163.com

monopoly; natural monopoly; price discrimination

30

caoqianseu@163.com


1.
2.
3.
4.

5. 4

6.

7.

8.

1.

100

90

10

80

20

a.

70

30

60

40

50

50

40

60

30

70

20

80

c.

10

90

100

200
10

b. MR = TR / Q

d.

31

caoqianseu@163.com

e. 300 200

f.

2.
a.

b.

3..Johnny Rockabilly CD
CD

24

22

20

18

16

14

CD CD 5
a. CD 1 2 CD 1

b. CD
c.
4. 200

a.

b.
c.
d.

32

caoqianseu@163.com

10

20

30

40

50

60

70

80

5.

6.Ectenia
240 10
D

Q = 10 P P
a.

b. 24

c.
2345

d.c

e.
7.AT&T

a.
b.

AT&T

33

caoqianseu@163.com

c.

8.
a.
?
b.

c.
9.per-unit
tax

10. 300 200

2000

10

100

200

300

300

300

100

300

200

300

200

300

200

300

200

300

200

a.
b.

c.

34

caoqianseu@163.com

d. 2500 2000 a
bc

11.Wiknam

P=10-Q
MR=10-2Q
TC=3+Q+0.5Q2
MC=1+Q
Q P
a.
b. 6

c. 9

ab

d. 6 a

9
12. Ectenia
DVD
P=1000-10Q
TR=1000Q-10Q2
MR=1000-20Q
MC=100+10Q
Q DVD P DVD
a.
b.
c.
d.
35

caoqianseu@163.com

i. 2000 ii. 50%iii. DVD 150 iv.

50%.

13.

a.

b. X Y
Z
c.b X
Y Z

d.

XY Z
e.
C X
YZ C
f.
XYZ C
g.ef

36

caoqianseu@163.com

37

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

16

caoqianseu@163.com)

caoqianseu@163.com

16
Sue Grafton
.Stephen King.David McCullough

...Stephenie Meyer

25 5

monopolistic competition
oxymoron

16.1
14

15

14

15

caoqianseu@163.com

imperfect competition

oligopoly

concentration ratio
50%
78%

81%89%
93%95%

monopolistic competition

DVD

14

caoqianseu@163.com

oligopoly:

monopolistic competition:

16.2
4

caoqianseu@163.com


14

16.2.1

a
b

2

a
b

caoqianseu@163.com

16.2.2
2 a

caoqianseu@163.com

16.2.3
4 14

4 a

4 b

efficient scale

excess capacity

4 ba

caoqianseu@163.com

b
a

16.2.4

caoqianseu@163.com

the product-variety externality

the business-stealing externality:

caoqianseu@163.com

.Joel Waldfogel

..the tyranny of the majority

. 1962

12

10

caoqianseu@163.com

2/3 3%

album-rock

Foot Locker
1.5%

10

Joel Waldfogel Slate, Thursday, October 4, 2007.

Larry the Cable Guy Daniel Lawrence Whitney

11

caoqianseu@163.com

16.3

10%
20%

2%

16.3.1

12

caoqianseu@163.com

1972 .Lee Benham

1960

33

1963 1963
7 26
20%

13

caoqianseu@163.com

16.3.2

PostKellogg
3
3 1000 100

100
1000 300

1000 3600

300

14

caoqianseu@163.com

..John Kenneth Galbraith.Friedrich

Hayek 20

1958
The Affluent Society

1944 The Road to Serfdom

1961

1974 2000

15

caoqianseu@163.com

16.3.3

Bayer

.Edward Chamberlin

16

caoqianseu@163.com

16.4

MR=MC

MR=MC

MR=MC

P=MC

P>MC

P>MC

17

caoqianseu@163.com

oligopoly; monopolistic competition

1.

2.

3.

4.

5.
6.

18

caoqianseu@163.com


7.

1.

a.
b.
c.
d.
2.
a. 2
b.
c.
d.
e.
3.

a.
b.
c.
d.
e.
f.
4.

a.
b.
c.
d.
e.
f.
5.
19

caoqianseu@163.com

a. P<MC, P>ATC
b. P>MC, P<ATC
c. P=MC, P>ATC
d. P>MC, P=ATC
6. Sparkle

a.

b.
c.

d.

7. N
Q=100/NP
MR=100/N2Q
TC=50+Q2
MC=2Q
a. N
b. N
c.
d.
e.
8.Nutville

a.
b.
c.
d.
e.
9.
a.
b.
c.
20

caoqianseu@163.com


10.Sleek
a.

b.

c.

d.c

11..Frank Perdue

a.
b.
12.

a.

b.a

c.

21

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

17

caoqianseu@163.com)

caoqianseu@163.com

17

Wilson, Penn, Dunlop, or Spalding

oligopoly

game theory

strategic

tic-tac-toe

oligopoly:
game theory:

17.1

caoqianseu@163.com

17.1.1

duopoly

Jack
Jill

1
10 110 20
100

1
1

17.1.2
3

caoqianseu@163.com

120
1
60 60

120

collusion

cartel
15

60 60
120

60
30
60 1,800

collusion:
cartel:

caoqianseu@163.com

bright-line rule

100 X
95

Alistair Lindsay; The Wall Street Journal, december 13, 2007.

17.1.3
5

caoqianseu@163.com

30

30 60 60
1800 =3060 40
70 50 2000 =4050

40
80 40

40
40 1600

1600 50
90 30 1500
40
40
.

Nash equilibrium

40 40
40 40

caoqianseu@163.com

17.1.4

JohnJoan
1

4 10 40
41 40
10

caoqianseu@163.com

17.2

prisoners

dilemma

17.2.1
Bonnie
Clyde

caoqianseu@163.com

20
8

1
1

8 8

88

020

200

11

8 20

dominant strategy

caoqianseu@163.com

17.2.2

30

40 30
40 1600 1600

2000 1500

30 1500 2000

1800 1800

30
40
30
2000 1800
40 1600
1500
40

40
40

jointly rational

10

caoqianseu@163.com

prisoners dilemma:

dominant strategy:

OPEC

Organization of
Petroleum Exporting Countries, OPEC 1960
1973 8

OPEC
OPEC
OPEC OPEC
OPEC

OPEC 1973 1985

1972 3 1974 11 1981 35
1980 OPEC
1986 13
OPEC
2007 2008
OPEC
OPEC
11

caoqianseu@163.com

17.2.3

12

caoqianseu@163.com

11

ExxonTexaco
1200 100

500 =600 100

600 =800 200

300
=400 100

200
400

400400

600300

300600

500500

17.2.4

non-cooperative equilibrium
13

caoqianseu@163.com

 3
4

17.2.5

2
30
40

40 40

1800 2000
1600

14

caoqianseu@163.com

.Robert Axelrod

tit-for-tat

an eye
for an eye, a tooth for a tooth

17.3
15

caoqianseu@163.com

17.3.1
common law

1890

1914

15

18 .

16

caoqianseu@163.com


1980 1983 2 24
.Robert Crandall.
Howard PutnamBraniff Airways
@#%#$%

$%*& 20%

@#$%&*#@

17.3.2

resale price maintenance

Superduper DVD 300
350
350

17

caoqianseu@163.com

DVD
DVD
11

CoyoteRoadrunner
20% 80%

predatory pricing

18

caoqianseu@163.com

 80%

tyingMakemoney

2
2

City 1.5 0.5

Country 0.5
1.5
1.5

19

caoqianseu@163.com

1998
.

.Franklin Fisher
.Richard Schmalensee

Windows

CD

80%

Mac Linux
50 3%

1999 10
.Penfield Jackson
2000 6

2001 9

20

caoqianseu@163.com

2002 11

Google

Google
Google
Google business-to-business, B2B

Christine Varney Google

.Dana Wagner Google
Google
.Adam Kovacevich
Google

Google 2.66%
Google

Google Google
70%
Google

Google

30%operating
marginGoogle 1990

Google
21

caoqianseu@163.com

 64 .Learned Hand

Google
Google .
Gary Reback.Carr & Ferrell
1990

spit on the sidewalk

Jeff Horwitz

Washington Post, June 7, 2009.

17.4

price fixing

22

caoqianseu@163.com

oligopoly game theory collusion; cartel;

Nash equilibrium; prisoners dilemma; dominant
strategy

1.
2.
3.
4.
5.
6.

7.
8.

23

caoqianseu@163.com

1. 1,000

8,000

7,000

6,000

5,000

4,000

3,000

2,000

1,000

5,000

6,000

7,000

8,000

9,000

10,000

11,000

12,000

a.
b.
c.

1000

d.c
2.
1993 11 30 OPEC
[] 1990 6

a. OPEC
b. OPEC
c. OPEC OPEC

do their share OPEC

3.

a.

b.

c.1994

4.

10
24

caoqianseu@163.com

a.

2525

1030

3010

2010

b.
c.1993

d. 3 9

5.SynergyDynaco

30,

70,

20

030

5040

a.
b.
c.

6.

A 40
B 30
D 10
25
a.

b.
c.b

d. B 50 A 80

25

caoqianseu@163.com

ab

7.

100 100 200

200 100
200
a.
b.
c.

8. 1

X
a. 22
b. X
c. X
9.Little KonaBig Brew

2,

07

1,

02

a.
b.a
c.

d.
10.
80

a. 80

b. 10
26

caoqianseu@163.com


c.

27

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

18

caoqianseu@163.com)

caoqianseu@163.com

18.

2010 14
3/4
fringe benefits 1/4

2
factors of

production

derived demand

19 20

caoqianseu@163.com

factors of production:

18.1
1
ab

a
b

final
goods

18.1.1

caoqianseu@163.com

competitive

profit maximizing

18.1.2
1
1

production
function

1 100
2 180
2 1
4

caoqianseu@163.com

marginal product of labor

1 2 100 180
80 =180-100

diminishing marginal product

caoqianseu@163.com


production function:
marginal product of labor:
diminishing marginal product:

18.1.3

10 80
800

value of the marginal product

1
10
1

marginal revenue product:

500
1 1000 500
800 300 600
100
400 500
100 3
3
3

caoqianseu@163.com

value of the marginal product:

18.1.4

caoqianseu@163.com

1960 2009 183%

labor-saving

labor-augmenting

150% 87%

14

caoqianseu@163.com

marginal product of labor,

MPLmarginal cost, MC 500
50 50 500
10 =500/10 W
MPL MC=W/MPL

MPL

MC

PMPLW PMPL=W
MPL P=W/MPL W/MPL MC
W/MPL=MC
P=MC.

14

19

.Ned Ludd

caoqianseu@163.com

1813 17

Luddite

18.2

21

18.2.1
1

15 15
20

15
20

slope backward
21

10

caoqianseu@163.com

18.2.3

1950 34% 2009

59%tastes

18.3

11

caoqianseu@163.com

18.3.1
5
12

caoqianseu@163.com

 S1 S2 W1
W1 W2

S1

S2 W1 W2 W2
L1 L2

1980
1967
1988

50%

13

caoqianseu@163.com

.Pia Orrenius

12.5% 3800
1100 1200
80%

100 200

40%

GDP

14

caoqianseu@163.com

25

1%~3%

Originally published in Southwest Economy, March/April 2006. Data updated for this edition by Dr.

Orrenius.

18.3.2

6 D1
D2 W1 W2 L1 L2

15

caoqianseu@163.com

D1 D2
W1 W2 L1 L2

16

caoqianseu@163.com

2 1959
2009 2.1%
1.9% 2%
35
2

1959-2009

2.1

1.9

1959-1973

2.8

2.8

1973-1995

1.4

1.2

1995-2009

2.6

2.3

2010 B-49

implicit price deflator

2
1973
1995

2.8% 1.4% 2.8% 1.2%

1995

1995 2009 2.6% 2.3%

17

caoqianseu@163.com

monopsony

15

18.4

capital

18

caoqianseu@163.com

18.4.1

purchase price

rental price

7
a

ab

19

caoqianseu@163.com

capital:

dividends
stockholder

20

caoqianseu@163.com

18.4.2

14 bubonic plague

black death

21

caoqianseu@163.com

50%

18.5

neoclassical theory of distribution

15

22

caoqianseu@163.com

factor of production; production function;

marginal product of labor; diminishing marginal product;
value of marginal product; capital

1.

2.
3.
4.

23

caoqianseu@163.com

5.

1.

a.
b.
c.
2.
a.
b.
c.
3.

13

19

25

28

29

29

a.
b. 10
c. 0 100
d.
e. 10 12

24

caoqianseu@163.com

4. 4 100

50

85

115

140

150

155

a.
b.
c.
d.
5.Ectenia 20 2

Q=100LL2
MPL=1002L
Q L MPL
a. W

b. 200 W

c. 4
6. 7 6
3

7.
a.

b. 2 30%
25

caoqianseu@163.com


c. 30% 50%
8.Leadbelly
150
a.
b. 30

c. 4

d.c

9. 20 1980 1990

a.

b.
10.

a. 3

b.
c.

d. 6

11.

a.

26

caoqianseu@163.com

b.
c.

d.

27

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

19

caoqianseu@163.com)

caoqianseu@163.com

19
20 5
2

18

19.1

19.1.1

compensating differential

caoqianseu@163.com

compensating differential:

( )

19.1.2

capital

human capital

caoqianseu@163.com

human capital:

1
1980 44% 2008
88% 35% 71%

1
1980

2008

45,310

43,493

65,287

81,975

+44%

+88%

27,324

31,666

36,894

54,207

+35%

+71%

2008
18

caoqianseu@163.com

1970
5% 2009 14% 1970 6%
2009 11%

19.1.3

caoqianseu@163.com

omitted variables

.Keira
Knightley

.Daniel
Hamermesh

.Jeff Biddle 1994

12

5% 5%~10%

beauty premium

caoqianseu@163.com

19.1.4

16

19.1.5

Johnny Depp
Serena Williams

caoqianseu@163.com

9/11

.C.Richard
C. Reid

selection bias
.Efraim Benmelech.Claude
Berrebi
8

caoqianseu@163.com

2000 ~2005

30

21

18% 26 60%

12%

35
Reid

9/11 26
.Mohammed Atta
33

Austan Goolsbee;

New York Times, September 14, 2006.

19.1.6

caoqianseu@163.com

16

market
power
union

strike
10%~20%.

efficiency
wages

turnover

union:
strike:
efficiency wages:

10

caoqianseu@163.com

19.2

discrimination

19.2.1

47,370

37,253

21%

36,198

31,509

13%

24%

15%

2008 14

2 median
21% 13%
24%
15%

75%

11%

11

caoqianseu@163.com

.Marianne Bertrand.
Sendhil Mullainathan

1300 5000
.
Lakisha Washington.Jamal Jones

12

caoqianseu@163.com

.Emily Walsh.Greg
Baker
2004 9

50%

19.2.2

13

caoqianseu@163.com

20

1986 .Jennifer Roback

19.2.3

14

caoqianseu@163.com

1988

20%

15

caoqianseu@163.com

 1960

1990

10% 13%

.
Muriel Niederle.Lise Vesterlund

Do Women Shy Away From Competition? Do Men Compete Too Much?

16

caoqianseu@163.com

 2 2 20

piece-rate basis 0.5

4
2 25%
25%2

0.5

75% 35%

38%

75% 43%

.Terrance Odean

Hal R. Varian;

New York Times, March 9, 2006.

17

caoqianseu@163.com

19.3

20

18

caoqianseu@163.com


compensating differential; human capital; union;
strike; efficiency wages; discrimination

1.
2.
3.
4.

5.
6.
7.
8.

1.

a.
b.
c.

2. 6
19

caoqianseu@163.com

subminimum

3.

[(job tenure)]
4.
a.
b.

5.

6.

7.
[merit pay]
a.
b.
c.
d.

8..Alan Greenspan
1960

9.

20

caoqianseu@163.com

a.combined labor market

b.
a

10.

21

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

20

caoqianseu@163.com)

caoqianseu@163.com

20

.Mary Colum.Ernest
Hemingway

3/4

inequality

20.1

human capital
compensating differentials

compensating wage differential

caoqianseu@163.com

1/5, 1/5 1/5

1/5 1/5 1 5%

2008

1/5

27,800

1/5

27,800~49325

1/5

49,325~75,000

1/5

75,000~113,205

1/5

113,205

5%

200,000

U.S. Bureau of the Census.

2 2
2008 1/5
4% 1/5 47.8% 1/5
1/5 1/5 1/5 12
2

1/5

1/5

1/5

1/5

1/5

5%

2008

4.0

9.6

15.5

23.1

47.8

20.5

2000

4.3

9.8

15.5

22.8

47.4

20.8

1990

4.6

10.8

16.6

23.8

44.3

17.4

1980

5.2

11.5

17.5

24.3

41.5

15.3

1970

5.5

12.2

17.6

23.8

40.9

15.6

1960

4.8

12.2

17.8

24.0

41.3

15.9

1950

4.5

12.0

17.4

23.4

42.7

17.3

1935

4.1

9.2

14.1

20.9

51.7

26.5

2 1/5 5%
U.S. Bureau of the Census.
2 2008 5%
20.5% 40%
2 1935
1/5 4%~5% 1/5
3

caoqianseu@163.com

 40%~50% 1935 1970

1/5 4.1% 5.5%
1/5 51.7% 40.9% 1970
2008 1/5 5.5% 4.0% 1/5
40.9% 47.8%
19

20.1.2

10%
10%

2009Human Development Report 2009

.
1 12

caoqianseu@163.com

 4.5
40.6

20.1.3

poverty rate

poverty
line

2008
median 61,521 22,025
13.2%13.2%

2 1959
1959 22.4% 1973 11.1%
50%

.F.John F. Kennedy
1970
1973
5

caoqianseu@163.com

 2 2

frequency 3
!

13.2

8.6

24.7

23.2

11.8

18

19.0

64

9.7

5.5

31.4

2008

poverty rate:
poverty line:

caoqianseu@163.com

20.1.4

in-kind transfers

10

50 65

life cycle

transitory income

caoqianseu@163.com

permanent income

life cycle:

permanent income:

.Michael Cox.
Richard Alm 2008
1/5 1/5
2006 1/5 149,963 1/5
9,974 15

1/5
1/5 14

1/5 1/5 3.9

1/5 3.1 1/5

1.7 2.1
8

caoqianseu@163.com

Mollie

Orshansky 1964 1955 1960

1.3

1995

caoqianseu@163.com

21,818 20,444

26,138

1960

18% 23%

Rebecca M. Blank;

Los Angeles Times, September 15, 2008.

20.1.5

10

caoqianseu@163.com

mobility

10 1/4
3%

20% 8%

4/5
1/5

20.2

positive

normative

11

caoqianseu@163.com

20.2.1

utilitarianism
.1748-1832..1806-1873

utility

diminishing marginal
utility

PeterPaul 8 2

10

12

caoqianseu@163.com

utilitarianism:

utility:

20.2.2

liberalism.John
Rawls 1971

just

an original position behind a veil of ignorance

maximin criterion
13

caoqianseu@163.com

social insurance

liberalism:

maximin criterion:

social insurance:

20.2.3

libertarianism

14

caoqianseu@163.com

.Robert Nozick

unfair
just

fairunequal

equality

Pam Pauline

20.3

15

caoqianseu@163.com

20.3.1
minimum-wage laws

20.3.2

welfare

Temporary Assistance for Needy Families, TANF

Supplemental Security Income, SSI

16

caoqianseu@163.com

1996

1970

welfare:

20.3.3

12

negative income tax

=1/3 1 .
6 1 9 2
3 0 1.5 -0.5
0.5

Earned Income Tax

17

caoqianseu@163.com

Credit, EITC

20.3.4

food stamps

Medicaid

2008 2009

Mac

Fannie MaeFreddie

18

caoqianseu@163.com

 1970 90 90th percentile

50

40

2004

20

19

caoqianseu@163.com

Raghuram Rajan;

Project Syndicate, July 9, 2010.

20.3.5

2

2
2
100%
100%

100%

1 0.3 30%

20

caoqianseu@163.com

workfare
1996

20.4

21

caoqianseu@163.com

.
.
.

poverty rate; poverty line;

in-kind transfers;

life cycle; permanent income; utilitarianism;

utility; liberalism; maximin criterion;
social insurance; libertarianism; welfare
negative income tax

1.

2.
3.
4.

5.

6.

22

caoqianseu@163.com

7.

1. 2 1970 19

2. 3

3.

4.
a.
b.
c.

5. 10 10 2
10 20 10 2.2
10
a.
b.
c.
d.
6.
a.
b.

7.
3 1 2.5
a.
b.
c.

23

caoqianseu@163.com

8.
Medicaid
7000
a. 7000

2
b.a
ab
c.a

ac
9.

TANF

EITC

a. TANF
TANF
b.EITC

c. TANF TANF EITC

10. 2010 .

24

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

21

caoqianseu@163.com)

caoqianseu@163.com

21

14
1

21.1

constrained

1000 10
2

caoqianseu@163.com

 2
1
100
consumption bundle:90
50 1000

1000
10 2

1
A 100 0 B
0 500 C 50 250
C A B
500

AB
budget constraint

A B 500
100 5 /

5 5

caoqianseu@163.com

 51 5

budget constraint:

1000 5 10

21.2

21.2.1

indifferent

indifference curve

2 A B C

A B
B C

marginal rate of substitution, MRS

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I2
I1MRS
1

2 I2 I1

D A
D
D
A D C
D D
C D C D

indifference curve:
5

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marginal rate of substitution:

21.2.2

A B
B C
A C
C A

AB C C A
!

MRS
6

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bowed
inward 4 A
1 6
6 / B
1 1
1 /

MRS
A
6
/ B
1 /

21.3

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5 1

2 5 1 1 5 1
2.
5 a

perfect substitutes

5 1

a
b

5 7
5
5 b
5 5 5 7 7 5

perfect complements

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 5 1

perfect substitutes:
perfect complements:

21.3

21.3.1

6
I2

optimum A
B

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tangent

I2 I3 A
B B

10

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utility

marginal utility

diminishing marginal utility:

X Y 2 1 X 2
Y 2.

MRS=PX/PY
MUX/MUY=PX/PY
MUX/PX=MUY/PY
X
Y

21.3.2

11

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initial optimum(new optimum)

7
4

7
normal good

inferior good 8

12

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21.3.3

2 1

set of buying opportunities

9
1000

13

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A 1000 1000
500 B D

2 1 10
10 5

normal good:
inferior good:

14

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21.3.4
income effect
substitution effect

1
1

10
A C

I1 A
B B
B

I2 B C
15

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B C
I1 B I2 C

10

I1 A B
I1 B
I2 C

B
A B
B C
A B B C

21.3.5

16

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11 a 2 1

250 750
b

11

a 2 1
A B 250 750 b

21.4

17

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21.4.1

law of demand

12 AB
C AD E

12

Giffen good
.Robert Giffen
18

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Giffen good:

19

.Robert Jensen.Nolan Miller

21.4.2

Sally
19

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 100

50 50

50
13 100
100 5000
40 60 2000

13

13

50

I2
50 60 14

BC1 BC2BC2 BC1

20

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ab

14

BC1 BC2

a
b

14 ab

b
21

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backward

6 5

5 25%
9% 100
40%

22

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 1993
15

2.5 19 .Andrew Carnegie

21.4.3

Sam

10

15

23

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 10% 1 1.10

15 10
0 10 0 11

15

5 5.5
10% 20% 16

16
aba

16 ab

ab

a
b
24

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21.5

25

caoqianseu@163.com

budget constraint; indifference curve; marginal

26

caoqianseu@163.com

rate of substitution; perfect substitutes; perfect complements

normal good; inferior good
income effect;
substitution effect; Giffen good

1. 3,000 3 6

2.
3.

4.
3 6
5. 3,000 4,000

6. 6 10 3
3,000

7.

1.

a.
b.
c.
2.

27

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a.
b.
c.
3.

a.
b.
c.
4.
a.
b.

5.
a. 100 2 4

b. 10%

6.
a.

b.

7. 6 Cup O Soup 1.50

60
a.
A
b. 2 a
30% B
c.

28

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d. A B
8.
a. 15%

b.
9.Sarah 100
6 8 10
6 8
8 10
10.

11. A
100 A 20 2

a.A
3 A

3 A
A 25
b.

12. 20
10 2
a.

b. 12

c.

13..George Stigler

29

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14.

a.

b.

c.b
15.

12

12

2 1

30

caoqianseu@163.com

Principles of
Microeconomics6th edition

N. Gregory Mankiw
Harvard University

22

caoqianseu@163.com)

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22

asymmetric information

political economy

behavioral economics

22.1

information asymmetry

hidden action

hidden

characteristic)

2001 . George Akerlof

Michael Spence Joseph Stiglitz

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22.1.1

agent
principal
moral
hazard

efficiency-wage theories 19

moral hazard:
agent:
principal:
3

caoqianseu@163.com

-
CEO

compensation packages

2005 -Enron
TycoWorldcom

22.1.2
4

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adverse
selection

adverse

lemon

adverse selection:

22.1.3

signaling

Adverse selection, anti-selection, or negative selection

lemon
5

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private information
16
20

as seen on TV

public information

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22.1.4

signaling

screening

deductible 1000 1000

1000 1500 500

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screening:

22.1.5

market successmarket failure

7
.
10 11
15 17
20

22.2

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political economy
public choice theory

22.2.1

18
Marquis de Condorcet

AB C
1

35

45

20

AB C

A BB CC A

B C
1 2 BB A B
1 3 AA A BB C
A
A C
2 3 CC

pairwise

majority votingA BB CC A

transitivity: A B B C A C

Condorcet paradox

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A B C C B
C A A A C
B B

22.2.2

1 2
1 B

Borda

count 18

.Kenneth Arrow 1951

ABC

unanimity:
A B A B

transitivity:
A BB C A C

independence
of irrelevant alternative: A

B C

Arrows
impossibility

theorem

10

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1
B C
A B A C
A B A B
C

Arrows impossibility theorem:

instant runoff

281

20%
79%

squeaky-wheel phenomenon
The squeaky-wheel gets oil.

11

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 21%
20% 2000
.Al Gore.Ralph Nader
.W.
.Michel Balinski
.Steven Brams

.Rida Larakimajority judgment

1~6
range voting

.D.Warren D. Smith
-

49 6 4 1 3
4 49 3 1
4 3

1936
.Bruce Davis 15

12

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Rocky
Network

13

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.Pedro Martinez

Carl Bialik

The Wall Street Journal, February 6, 2009.

22.2.3

1 100 200

100
0 200
100

10

median voter theorem

median voter

14

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 50 100

100 90
modal
15 1

100 100
100
80 100 100
100 120 100
100

150
100 150
50% 20 100
15 50 25
60

40%
60%

median

,,
100 50 51
100 1

150 100 35

1 50 25 75
100 150 200 50 50

50 100
1
40 60 100 150
60 40 100

15

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median voter theorem:

22.2.4

-
20% 9:1, 25% 10:1, 15%
11:1, 40% 12:1

22.3

16

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range

behavioral economics

22.3.1

Homo economicus

Homo sapiens

.Herbert Simon

satisficers

90%
90%

90%

1000

1000
1001
X

Homo economicus Economic human

Homo reciprocans, or
Reciprocal human
17

caoqianseu@163.com

401K 401K

22.3.2

ultimatum

game
100
A B A B 100 A
B B A B
A

18

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A B

A 99 B 1 B
A B B
A B B A B 1
17 99-1

B B 1
A B 1
B 30 40
B
99-1
70-30

18 19

B
A

22.3.3

1.A 50 B 60
2.A90

50 B91

60

1 B 2 A

19

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 2 90

50
1

inconsistency over time

76%

sin taxes

20

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.A.David A.
Paterson

2
5 2 /

21

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18

N. Gregory Mankiw;

New York Times, June 6, 2010

22.4

22

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moral hazard; agent; principal; adverse

selection; signaling;
screening; political
economy; Condorcet paradox; Arrows impossibility
theorem; median voter theorem; behavioral economics

1.
2.
3.

23

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4.
5.
6.

1.

a.
b.
c.

2. 5000
6000

3.

4.
HIV HIV HIV

5.

6.Ken

24

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7.

a.
b.

c.ab
8.

Dexter

Glee

House

a.
b.

c.
d.

9.

14

10

12

10

15 3
a.
b.
25

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c.median
d.

e.d

f.
10.

A B B C
A C

A B A B

11. 1
1

12.
a.

b.

26

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