微观经济学现代观点讲义（清华大学 林徐）.pdf

Chapter One
The Market
Economic Modeling
‹ What causes what in economic
systems?
‹ At what level of detail shall we model
an economic phenomenon?
‹ Which variables are determined
outside the model (exogenous) and
which are to be determined by the
model (endogenous)?
Modeling the Apartment Market
‹ How are apartment rents determined?
‹ Suppose
– apartments are close or distant, but
otherwise identical
– distant apartments rents are
exogenous and known
– many potential renters and landlords
Modeling the Apartment Market
‹ Who will rent close apartments?
‹ At what price?
‹ Will the allocation of apartments be
desirable in any sense?
‹ How can we construct an insightful
model to answer these questions?
Economic Modeling
Assumptions
‹ Two basic postulates:
– Rational Choice: Each person tries
to choose the best alternative
available to him or her.
– Equilibrium: Market price adjusts
until quantity demanded equals
quantity supplied.
Modeling Apartment Demand
‹ Demand: Suppose the most any one
person is willing to pay to rent a
close apartment is $500/month. Then
p = $500 ⇒ QD = 1.
‹ Suppose the price has to drop to
$490 before a 2nd person would rent.
Then p = $490 ⇒ QD = 2.
Modeling Apartment Demand
‹ The lower is the rental rate p, the
larger is the quantity of close
apartments demanded
p ↓⇒ QD ↑.
‹ The quantity demanded vs. price
graph is the market demand curve
for close apartments.

Market Demand Curve for
Apartments
p
QD
Modeling Apartment Supply
‹ Supply: It takes time to build more
close apartments so in this short-run
the quantity available is fixed (at say
100).