《经济类课件汇集》教学资源（PPT讲稿，英文版）Chapter Nine Buying and Selling

Chapter nine Buying and Selling

Chapter Nine Buying and Selling

What Are We Doing in this Chapter? We expand our basic consumer choice framework to include the possibility that consumers can sel something to generate income Again in terms of theoretical framework nothing is new

What Are We Doing in this Chapter? We expand our basic consumer choice framework to include the possibility that consumers can sell something to generate income. Again, in terms of theoretical framework, nothing is new

Endowments禀赋 The list of resource units with which a consumer starts is his endowment A consumers endowment wil be denoted by the vector @(omega)

Endowments 禀赋 The list of resource units with which a consumer starts is his endowment. A consumer’s endowment will be denoted by the vector (omega). 

Endowments Eg.O=(01,O2)=(10,2) states that the consumer is endowed with 10 units of good 1 and 2 units of good 2. What is the endowments value? For which consumption bundles may it be exchanged?

Endowments E.g. states that the consumer is endowed with 10 units of good 1 and 2 units of good 2. What is the endowment’s value? For which consumption bundles may it be exchanged?  = ( , ) = ( , ) 1 2 10 2

Budget Constraints revisited So, given p, and p2, the budget constraint for a consumer with an endowment (@1,@2)is p1X1+p2X2=p1a1+p202 The budget set is {(x1,x2)P1x1+p2x2≤p11+P2O2, X1≥0,x≥0

Budget Constraints Revisited So, given p1 and p2 , the budget constraint for a consumer with an endowment is The budget set is ( , ) 1 2 p1 x1 + p2 x2 = p1 1 + p2 2 .   ( , ) , , . x x p x p x p p x x 1 2 1 1 2 2 1 1 2 2 1 0 2 0 +  +    

Budget Constraints revisited x2 p1X1+p2X2=p1o1+p202 Budget set {(x1,x2)P1x1+P2X2sP11+p202, x1≥0,X2≥0

Budget Constraints Revisited x2 1 x1 2 p1 x1 + p2 x2 = p11 + p22 Budget set   ( , ) , , x x p x p x p p x x 1 2 1 1 2 2 1 1 2 2 1 0 2 0 +  +    

Budget Constraints revisited x2 p1X1+p2X2=p1o1+p202 Budget set p1x1+p2x2=p1a1+p202

Budget Constraints Revisited x2 1 x1 2 p1 x1 + p2 x2 = p11 + p22 p1 x1 p2 x2 p1 1 p2 2 ' ' ' ' + =  +  Budget set

Budget Constraints revisited The endowment point is always on x2 the budget constraint p1X1+p2X2=p1o1+p202 So price changes pivot the constraint about the endowment point p1x1+p2X2=p101+p202

Budget Constraints Revisited x2 1 x1 2 p1 x1 + p2 x2 = p11 + p22 The endowment point is always on the budget constraint. p1 x1 p2 x2 p1 1 p2 2 ' ' ' ' + =  +  So price changes pivot the constraint about the endowment point

Budget Constraints revisited The constraint p1X1+p2x2=p1o1+p202 s p1(x1-01)+p2(X2-02)=0 That is the sum of the values of a consumer's net demands is zero

Budget Constraints Revisited The constraint is That is, the sum of the values of a consumer’s net demands is zero. p1 (x1 −1 ) + p2 (x2 −2 ) = 0. p1 x1 + p2 x2 = p11 + p22

Net demands x2 p1(x1-1)+p2(X2-2)=0 At prices(p,, p2) the consumer sells units of good 1 to acquire more units of good 2

Net Demands x2 1 x1 2 p1 (x1 −1 ) + p2 (x2 −2 ) = 0 x2 * x1 * At prices (p1 ,p2 ) the consumer sells units of good 1 to acquire more units of good 2