經(jīng)濟(jì)學(xué)英文教學(xué)課件：KW2-Ch10 The Rational Consumer

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10>>?2009WorthPublishersTheRationalConsumerHowconsumerschoosetospendtheirincomeongoodsandservicesWhyconsumersmakechoicesbymaximizingutility,ameasureofsatisfactionfromconsumptionWhytheprincipleofdiminishingmarginalutilityappliestotheconsumptionofmostgoodsandservicesHowtousemarginalanalysistofindtheoptimalconsumptionbundleWhatincomeandsubstitutioneffectsareOpportunityCostandDecisionsTheutilityofaconsumerisameasureofthesatisfactiontheconsumerderivesfromconsumptionofgoodsandservices.Anindividual’sconsumptionbundleisthecollectionofallthegoodsandservicesconsumedbythatindividual.Anindividual’sutilityfunctiongivesthetotalutilitygeneratedbyhisorherconsumptionbundle.Theunitofutilityisautil10152839485560636463Totalutility(utils)Marginalutilityperclam(utils)0123456789QuantityofclamsUtilityfunctionMarginalUtilityCurve798654321070605040302010Totalutility(utils)Quantityofclams7986543211614121086420–2Marginalutilityperclams(utils)Quantityofclams(a)Cassie’sUtilityFunction(b)Cassie’sMarginalUtilityCurveCassie’sTotalUtilityandMarginalUtilityCassie’sTotalUtilityandMarginalUtilityCassie’stotalutilitydependsonherconsumptionoffriedclams.Itincreasesuntilitreachesitsmaximumutilitylevelof64utilsat8clamsconsumedanddecreasesafterthat.Themarginalutilitycurveslopesdownwardduetodiminishingmarginalutility;eachadditionalclamgivesCassielessutilitythanthepreviousclam.Cassie’sTotalUtilityandMarginalUtilityNotethatthe9thclamis“toomuch.”ThePrincipleofDiminishingMarginalUtilityThemarginalutilityofagoodorserviceisthechangeintotalutilitygeneratedbyconsumingoneadditionalunitofthatgoodorservice.Themarginalutilitycurveshowshowmarginalutilitydependsonthequantityofagoodorserviceconsumed.Theprincipleofdiminishingmarginalutilitysaysthateachsuccessiveunitofagoodorserviceconsumedaddslesstototalutilitythanthepreviousunit.IsMarginalUtilityReallyDiminishing?Areallgoodsreallysubjecttodiminishingmarginalutility?Ofcoursenot;thereareanumberofgoodsforwhich,atleastoversomerange,marginalutilityissurelyincreasing.Examplesare:Downhillskiing,whichinvolvesmorefearthanenjoymentatthestart,butthenbecomespleasurableafteritsmastered.Peoplewhoarenotaccustomedtodrinkingcoffeefinditbitter.Ifyouneedtworollsofwallpapertofinisharoom,themarginalutilityofthesecondrollislargerthanthatofthefirstroll.Sowhydoesitmakesensetoassumediminishingmarginalutility?Mostgoodsdon’tsufferfromtheabovequalifications.Intherelevantrangeofconsumption,marginalutilityisstilldiminishing.OystersversusChickenIsaparticularfoodaspecialtreat,somethingyouconsumeonspecialoccasions?Orisitanordinary,take-it-or-leave-itdish?Theanswerdependslotonhowmuchofthatfoodpeoplenormallyconsume,whichdetermineshowmuchutilitytheygetatthemarginfromhavingabitmore.Unliketoday,chickenwasaluxurydishbecausechickenswereexpensivetoraise.Also,oysterswereverycheapandabundantandwereregardedaspovertyfood.However,theemergenceofnew,technologically-advancedmethodsofraisingandprocessingthebirdsmadechickenabundantandcheap,whilepollutiondestroyedmanyoysterbeds,reducedsupply,andhumanpopulationgrowthincreaseddemand.Assuch,oysterswentfrombeingcommonfoodtoaluxurygoodwhilechickentookthereverse.BudgetsandOptimalConsumptionAbudgetconstraintrequiresthatthecostofaconsumer’sconsumptionbundlebenomorethantheconsumer’stotalincome.Aconsumer’sconsumptionpossibilitiesisthesetofallconsumptionbundlesthatcanbeconsumedgiventheconsumer’sincomeandprevailingprices.Aconsumer’sbudgetlineshowstheconsumptionbundlesavailabletoaconsumerwhospendsallofhisorherincome.102345108642ABCDEFAffordableconsumptionbundlesthatcostallofSammy'sincomeSammy’sBudgetLine,BLAffordableconsumptionbundlesUnaffordableconsumptionbundlesQuantityofclams(pounds)Quantityofpotatoes(pounds)ABCDEFConsumptionbundle012345Quantityofclams(pounds)1086420Quantityofpotatoes(pounds)ThebudgetlinerepresentsallthepossiblecombinationsofquantitiesofpotatoesandclamsthatSammycanpurchaseifhespendsallofhisincome.Itisalsotheboundarybetweenthesetofaffordableconsumptionbundles(theconsumptionpossibilities)andunaffordableones.TheBudgetLineSammy’sUtilityfromClamandPotatoConsumptionOptimalConsumptionChoiceTheoptimalconsumptionbundleistheconsumptionbundlethatmaximizesaconsumer’stotalutilitygivenhisorherbudgetconstraint.Sammy’sBudgetandTotalUtilitySammy’stotalutilityisthesumoftheutilityhegetsfromclamsandtheutilityhegetsfrompotatoes.Quantityofpotatoes(pounds)543210108642AABBCCDDEEBLUtilityfunctionFF5432108070605040302010Quantityofclams(pounds)0246810(a)Sammy’sBudgetLine(b)Sammy’sUtilityFunctionTheoptimalconsumptionbundle…Quantityofclams(pounds)Quantityofpotatoes(pounds)…maximizestotalutilitygiventhebudgetconstraintTotalutility(utils)OptimalConsumptionBundleSammy’stotalutilityismaximizedatbundleC,whereheconsumes2poundsofclamsand6poundsofpotatoes.ThisisSammy’soptimalconsumptionbundle.FoodforThoughtonBudgetConstraintsBudgetconstraintsaren’tjustaboutmoney.Infact,therearemanyotherbudgetconstraintsaffectingourlives.Examplesare:Limitedamountofclosetspaceforclothes.Afixednumberofhoursinaday.AdieterontheWeightWatchersplanisonlyallowedamaximumnumberofpointsregardingthefoodtheycaneateachdaywherebyeachfoodisassignedacertainnumberofpoints.Thedieterisjustlikeaconsumerchoosingaconsumptionbundle:pointsaretheequivalentofprices,andtheoverallpointlimitistheequivalentoftotalincome.TheConsumptionPossibilitiesofAmericanWorkers,1895-2000Overthepastcentury,theconsumptionpossibilitiesoftheaverageAmericanworkerhaveincreasedradicallyasthenationhasbecomevastlyricher.AccordingtoEconomistDeLong,In1895,anaverageworker’sannualincomewouldhavebought7.7one-speedbicycles;in2000,itwouldhavebought278bicycles.In1895,theworker’sannualincomewouldhavebought45fullsetsofdinnerplates;in2000,itwouldhavebought556sets.In1895,anaverageworker’sannualincomewouldhavebought0.83ofaSteinwaypiano;in2000,itwouldhavebought1.8pianos.Byanystandard,theaverageAmerican’sconsumptionpossibilitieshaveincreasedenormously.SpendingtheMarginalDollarThemarginalutilityperdollarspentonagoodorserviceistheadditionalutilityfromspendingonemoredollaronthatgoodorservice.Sammy’sMarginalUtilityperDollarMarginalUtilityperDollarIfSammyhas,infact,chosenhisoptimalconsumptionbundle,hismarginalutilityperdollarspentonclamsandpotatoesmustbeequal.654321BCBPMUC/PCMUP/PPC5432100246810Totalutility(utils)Quantityofclams(pounds)Quantityofpotatoes(pounds)Attheoptimalconsumptionbundle,themarginalutilityperdollarspentonclamsisequaltothemarginalutilityperdollarspentonpotatoes.TheRightMarginalComparisonMarginalanalysissolves“howmuch”decisionsbysettingthemarginalbenefitofsomeactivityequaltoitsmarginalcost.Inconsumptiondecisions,unlikeproductiondecisions,there’sabudgetconstraintwhichmustbeaccountedforwhendoingmarginalanalysis.Therightanswerformarginaldecisionsinvolvingconsumptionisthatthemarginalutilityperdollarspentoneachgoodmustbethesameattheoptimalconsumptionbundle.Byfactoringinprices,thiscomparisontakesintoaccountthefactthataconsumerhasalimitedamountofmoneytospend.OptimalConsumptionRuleTheoptimalconsumptionrulesaysthatwhenaconsumermaximizesutility,themarginalutilityperdollarspentmustbethesameforallgoodsandservicesintheconsumptionbundle.ButAreConsumersReallyRational?Manycompaniesofferretirementplansfortheiremployees,suchasthe401(k),whichsavetheworkerthousandsofdollarsintaxeseachyear.However,someplansinvestthesesavingsintheirownstockandwhenthecompanygoesunder,theemployeeslosetheirsavings,e.g.,Enron,BearStearns.Employeesshouldcomparethemarginalutilityofadollarspentoncurrentconsumptionwiththemarginalutilityofadollarsavedforretirement.Theyshouldweighthetaxadvantagesofsavingthroughtheemployerplanagainsttherisksoflettingtheemploymentdecidewheresavingsareinvested.ButAreConsumersReallyRational?Butrecenteconomicresearchsuggeststhatmostpeoplearen’tcarefulabouttheseissues.AstheNationalBureauofEconomicResearchputsit,workersseemtofollowthepathofleastresistance,insteadofcomparingtheiroptionsandmaximizingtheirutility.Behavioraleconomistsquestionthewholeconceptoftherationalconsumer.Theirresearchfocusesonsituationsinwhichpeopledon’tseemtoberational—thatis,whentheybehaveinwaysthatcan’tbeeasilyexplainedbyutilitymaximization.BuyingYourWayOutofTemptationItmightseemoddtopaymoretogetless.Butsnackfoodcompanieshavediscoveredthatconsumersareindeedwillingtopaymoreforsmallerportions,andexploitingthistrendisarecipeforsuccess.Smallpackagesarepopularbecausetheyhelpconsumerseatlesswithouthavingtocountcaloriesthemselves.Theextrautilitygainedfromnothavingtoworryaboutwhetherthey’veeatentoomuchisworththeextracost.Consumersarebeingrational:inadditiontotheirsnack,they’rebuyingalittlehand-to-mouthrestraint.FromUtilitytotheDemandCurveThemainreasonforstudyingconsumerbehavioristogobehindthemarketdemandcurve—tounderstandhowthedownwardslopeofthemarketdemandcurveisexplainedbytheutility-maximizingbehaviorofindividualconsumers.MarginalUtility,theSubstitutionEffect,andtheLawofDemandThesubstitutioneffectofachangeinthepriceofagoodisthechangeinthequantityconsumedofthatgoodastheconsumersubstitutesthegoodthathasbecomerelativelycheaperforthegoodthathasbecomerelativelymoreexpensive.TheIncomeEffectTheincomeeffectofachangeinthepriceofagoodisthechangeinthequantityconsumedofthatgoodthatresultsfromachangeintheconsumer’spurchasingpowerduetothechangeinthepriceofthegood.NormalGoodsInferiorGoodsGiffenGoodsGiffenGoodsBackwhenIrelandwasadesperatelypoorcountry—nottheprosperous“CelticTiger”ithaslatelybecome—itwasclaimedthattheIrishwouldeatmorepotatoeswhenthepriceofpotatoeswentup.Thatis,someobserversclaimedthatIreland’sdemandcurveforpotatoesslopedupward,notdownward.Supposethatthereisagoodthatabsorbsalargeshareofconsumer’sbudgetsandthatthisgoodisalsoinferior—peopledemandlessofitwhentheirincomerises.Supposethepriceofthegood,saypotatoes,increases.Thiswould,otherthingsequal,causepeopletosubstituteothergoodsforpotatoes.Butotherthingsarenotequal:giventhehigherpriceofpotatoes,peoplearepoorer.Thisincreasesthedemandforpotatoesbecausepotatoesareaninferiorgood.MortgageRatesandConsumerDemandMostpeoplebuyhouseswithmortgages—loansbackedbythevalueofthehouse.Theinterestratesofsuchchangeovertime.Forexample,theyfellquitealotbetween2000and2003.Whenmortgageratesfall,thecostofhousingfallsandthedemandforhousinggoesupasevenpeoplewhohavemortgagesathighratesareabletorefinancethematlowerrates.Economistshavenoticedthatwhenthishappens,thedemandforothergoodsalsorises,suchasfurniture,cars,morevacationtimeetc.WHY?MortgageRatesandConsumerDemandWhenhousingischeaper,thereisasubstitutioneffect:peoplehaveanincentivetosubstitutehousinginplaceofothergoodsintheirconsumptionbundle.Sowhenhousepricesfall,peopleareineffectricher—thereisanoticeableincomeeffect.Sopeoplebuymoreoftheothergoodsinadditiontothehousesthattheybuy.Consumersmaximizeameasureofsatisfactioncalledutility.Eachconsumerhasauti