Intermediate
Microeconomics
-------------Introduction
Part 1 MICROECONOMICS
AND MACROECONOMICS
Microeconomics
The study of how households and firms make
decisions and how they interact in markets
Macroeconomics
the study of the economy as a whole and
economy-wide phenomena, including inflation,
unemployment, and economic growth
Part 2 Describing the
relationship
(1) Economic models
• Two key variables:
• Endogenous variable: Endogenous
variables are those variables
that a model tries to explain.
• Exogenous variable: Exogenous
variables are those variables
that a model takes as given.
Part 2 Describing the
relationship
(1) Economic models
• Objective:
• 1)Show the key relationship among
endogenous variables and the
exogenous variables that are given.
• 2)Comparative statics: show how
changes in the exogenous variables
affecting the endogenous variables
Part 2 Describing the
relationship
(1) Economic models
• Assumptions——the start of our analysis.
• A multitude of models：Whether the
underlying assumptions are reasonable for
the problems facing to us。
• Two implicit and important assumptions
throughout microeconomic and
macroeconomics
Part 2 Describing the
relationship
(1) Economic models
• 1)Economic actors are fully
rational.——Optimization principle
• Households and firms do the best
they can for themselves, given their
objectives and the constraints they
face.
Part 2 Describing the relationship
(1) Economic models
• 2)The resources are scarce.
• Scarcity means that the economy has
limited resources and therefore cannot
produce all the goods and services that
people desire.
Economics is the study of how society
locating its scarce resources.
Part 2 Describing the
relationship
(2)Function
•
•
•
•
•
Demand function
Utility function
Supply function
Cost function
……
Part 3 How this semester
proceeds
1 . Consumer theory:
• The consumers will choose the best
bundles they can afford.( i,e. The
consumers will maximize their utility
under the budget constraints coming
to them.)
Part 3 How this semester
proceeds
2. Producer theory:
• The producers will maximize their
profits under the constraints of
technology and market.
Part 3 How this semester
proceeds
3 . Market demand and industry supply
• Uncertainty
• Do you know how to fix the premium
in the perfectly competitive market?
Part 3 How this semester
proceeds
Game theory
• 如果给你两个师的兵力，你的任务是攻克“敌
人”占据的一座城市，而敌军的守备力量是三
个师。规定双方的兵力只能够整师地移动，通
往城市的道路只有甲乙两条。当你攻击时，你
的兵力超过敌人，你就胜利；你的兵力比敌军
的守备兵力少或者相等，你就失败。
• 问：我军获胜概率是多少？
Part 3 How this semester
proceeds
•
•
•
•
Exchange :
The Edgeworth box
Information technology
Asymmetric information
Part 4 Hints
• 不要通读全书，把握模型的几何特点及其经济
含义
• 注意把握体系，切忌零散地死记
• 注意经济学和数学的关系：经济学是引导，数
学是工具，经济学不是数学
• 适当习题，但是要以理解为前提，不要用题海
战术
• 对于这一科，实践证明，“临时抱佛脚”并不
那么管用。
Part 5 Example
• 如果一个典型的消费者的偏好是“完全
替代”的，那么请描述出这个消费者所
做出的可能的最优选择。