Introduction to Chapter 1

First, the framework of microeconomics.

Microeconomics is about resource allocation. This paper mainly talks about two aspects of resource allocation: 1 resource allocation mode (market or plan). The microeconomic view is price mode, that is, market allocates resources; The efficiency of resource allocation, including the principle of how to make market allocation efficient, and the market failure after the principle is uncontrollable.

In this way, the whole microeconomics can be regarded as two parts. The first part is from Chapter 2 to Chapter 9, which talks about how to allocate the price of resources, including product market and factor market. The second part is the next three chapters.

Second, the research methods of microeconomics

1, Balance: The general calculation problem is to write the equation by using the balance condition and find the required value.

2. Marginal analysis: marginal revenue = marginal cost.

Generally speaking, the content of introduction will not be involved in the exam, but generally speaking, it is worth our attention to grasp microeconomics. This is helpful to understand the relationship between chapters in the future.

The second chapter is the equilibrium price theory (the qualitative and quantitative relationship among D, S and P).

Balanced price decision

1, pay attention to the difference between demand and demand, supply and supply (linear or inching)

2. Equilibrium condition: Qs=Qd (pay attention to the diagram)

Two. elastic theory

1 You can understand the definition of flexibility without rote learning.

XX XX elasticity: dependent variable comes first, independent variable comes last.

2 factors affecting the price elasticity of demand (pay attention to practice)

3 the relationship between demand price elasticity and total income

For example, cheap food hurts farmers, and small profits are quick turnover.

4. Influencing factors of supply price elasticity (also need to be linked with reality)

5 Income elasticity

Due to Engel's law, it can be concluded that the development trend of agriculture is downward.

Application of three-equilibrium price theory

Support price and maximum price (see for yourself, because there is no way to draw, I really don't know how to describe it)

Neither the support price nor the maximum price limit has changed the level of demand and supply, but only the demand and supply and demand, that is, the line has not moved.

Chapter III Utility Theory-the principle of maximizing consumer utility.

First, consumer equilibrium conditions.

1, algebraic analysis-radix theory-marginal utility analysis

Law of μ decline

Equilibrium conditions: two equations, one is income restriction and the other is cost performance.

2. Geometric analysis-ordinal number theory-indifference curve

Consumer preference: completeness, transitivity and monotonicity. The first two characteristics show that consumers are rational.

Understand the meaning of indifference curve position.

Equilibrium condition: marginal substitution rate = price ratio

Note: The meaning of marginal substitution rate 1, who replaces who. 2 understand the movement of the budget line (translation, slope)

Second, the formation of demand curve (not easy to have problems)

Look at the deduction process in the textbook.

Third, substitution effect and income effect (the result of price changes)

When analyzing the substitution effect, it is on the same indifference curve (that is, analyzing the substitution utility without changing the utility).

Income effect: auxiliary analysis with price compensation line

Chapter IV Production Theory (How to Determine Output by Using Factors)

First, short-term: some changes in production factors.

Principle: Law of diminishing marginal returns

Determine the reasonable input area of elements: the area from AP=MP to MP=0. (I'm not sure if it's specific)

Second, long-term: the optimal combination of elements.

Similar to consumer utility analysis

Among them, scale reward-changing the quantity of two production factors in the same proportion.

Chapter V Cost Theory (How Output Determines Cost)

First, the concept of cost.

The difference between the explicit cost and the implicit cost of 1 lies in whether the ownership of the element belongs to the user.

2. Production cost (also called economic cost) = explicit cost+implicit cost.

3. Difference between accounting cost and economic cost: Accounting cost does not include normal profit.

4. Normal profit is the return of entrepreneurial talents; Economic profit =TR- economic cost

(The profit maximization pursued by an enterprise refers to economic profit)

5. Opportunity cost: it is not the cost actually spent, but the income given up. Opportunity cost is meaningful only when resources have multiple uses. For example, land has only one purpose, which is to provide for the market, so there is no opportunity cost.

Second, the short-term cost analysis

A * * * has seven costs: STC, SFC, SVC, SAC, SAVC, SAFC and SMC.

Find out the relationship between these seven costs (explained by the chart). If you know SMC, SAVC and SAC, you can know the other four.

Third, long-term cost analysis.

1, LTC: is the envelope curve of the minimum STC of each rate of return.

The so-called plan is in the long term and the operation is in the short term. All long-term plans are realized at a specific short-term cost scale.

2, LAC: It is also an envelope curve.

Shape influencing factors: economies of scale or uneconomies; Internal economy or diseconomy.

Location factors: external economy or non-economy, for example, the influence of industry and national policies.

B, the scope is economic or uneconomical. The expansion of product range and the reduction of original cost are scope economy, and vice versa. For example, whether the banking industry implements separate operation or mixed operation.

3、LMC

Form: It is determined by the scale of diminishing marginal income.

Chapter VI Perfect Competition Market (Output Decision for Maximizing Profit)

Law of income

TR=P*Q AR=TR/Q=P MR=dTR/dQ

Characteristics of a perfectly competitive market: D = AP = MP = P.

Second, short-term equilibrium.

1, yield determination: MC = Mr = p.

2. Profit and loss analysis: analyze with the chart in the book.

Note: CSRC is probably the reason for the loss of enterprises, but it is not the reason for the suspension of production.

The information reflected by the closing point is two aspects: price and output.

3. Supply curve: pay attention to the definition domain.

4. Producer surplus: the net welfare of producers.

Three. Long-term equilibrium: profit =0

Condition: P=LMC=LAC=SMC=SAC

Consider why the enterprise should continue to produce when the profit is equal to zero.

Analysis: an economic profit =0, normal profit is not =0.

B If the whole society is in perfect competition, everything produced is profit =0.

C, profit =0 is a long-term trend, but in the short term, there are still opportunities for profit to be greater than 0, which requires enterprises to improve management and technology and reduce costs.

D, when p < minlac, not all manufacturers quit, which was decided by SAVC at that time.

Long-term supply curve: a, the existence of manufacturers is not a one-to-one relationship, but the existence of supply behavior.

B, the existence of the industry, divided into three kinds: increasing cost, constant cost and decreasing cost.

Chapter VII Imperfectly Competitive Markets

First, the decision analysis of monopoly market

1, income analysis

MR=dTR/dQ=d(P.Q)/dQ

MR=P*dQ/dQ+Q*dP/Dq=P+Q*dP/dQ

∴ if dP/dQ=0, Mr = p；; If DP/dq < 0, Mr < p.

2, the conditions for the formation of monopoly (read by yourself)

3, production decision

Single output decision: MR=MC (understood by chart)

Usually, in the initial stage of production, monopoly manufacturers usually lose money in a short period of time because consumers don't understand the products or invest too much money in the early stage.

Because the point of tangency between P and SAC is not fixed, monopoly firms have no fixed profit and loss point.

There is no short-term supply curve for monopoly manufacturers.

In the long run: the profit must be greater than 0.

There is P > MC under monopoly and P=MC under competition, so the efficiency under monopoly is not as good as that in competitive market.

4. Price decision

Pricing principle: A deprives consumers of surplus.

B, according to the difference of price demand elasticity, set the price.

Pricing strategy: price discrimination. When products with the same production cost are sold at the same time, different prices are realized for different consumers.

(Differential pricing: different costs)

First-class price discrimination: buy a unit product, and each unit product is sold at the highest price. CS was completely deprived.

The implementation conditions of first-level price discrimination: the consumption in market A is less, and the consumers in market B usually buy one by one (such as accountants, lawyers and doctors).

Inference: Because CS can be deprived, the output will continue to expand until P=MC.

Second-degree price discrimination: pricing (such as bulk commodities) according to the difference in purchase volume.

Implementation conditions: commodities with easy-to-measure consumption, such as telephones and taxis.

Its principle is also to deprive CS.

Three-level price discrimination: pricing according to different price demands. For example, different fares for the same performance.

Realization conditions: A has a word consumer group, which can effectively distinguish consumer group B. Different groups have different elasticity of price demand.

Pricing principle: the price with high elasticity of price demand is low, and vice versa.

Summary: Price discrimination is more important and may be calculated!

Second, the decision of monopoly competition.

Product differences-leading to monopoly-short-term performance

Similar products-leading to competition-long-term performance

1 demand curve

There are two: D and D.

2, short-term equilibrium (graphic analysis)

3 Long-term equilibrium: profits tend to zero (note the diagram)

4. Efficiency comparison

It is the same as a perfectly competitive market: there are many manufacturers and many products; Long-term equilibrium is that profits tend to zero.

Difference: a production efficiency, Q 1 < Q2, there is redundant productivity, which does not reach the maximum potential productivity.

B, price, p1"p2;

C, scale, Lac 1 "Lac2 "

D, economic efficiency P》LMC

Three. oligopoly

1, features: decision-making is interactive, there is no demand curve, and the equilibrium is uncertain.

2, Nash equilibrium (game method, less measurable)

While other manufacturers remain unchanged, each manufacturer makes the best choice.

3. Cournot model

Suppose: two manufacturers, the same product, the cost is zero and so on.

By mastering the calculation method of this model and giving a demand function, the output and price of each manufacturer can be determined.

4. Swaziland model-price rigidity

Understand the curved demand curve

5, cartel-price alliance, loose agreement, typical "prisoner's dilemma", very unstable.

Cartel paradox: when there is no agreement, it is more profitable to reach an agreement than not to abide by it; When there is an agreement, when everyone else keeps it, if you don't keep it, you will earn more.

Chapter 8 Requirements for Elements

Single-factor demand characteristics: joint demand and derived demand.

Second, the demand principle of production factors: marginal income = marginal loss

1, marginal benefit of using factors

MRP=dTR/dL=dQ/dL*dTR/dQ=MP*MR

VMP=MP*P

∴P=MR,VMP=MRP (perfectly competitive market)

Mr. P & gtVMP & gt Incomplete competition in the market

2, the marginal cost of using factors

MFC=MP*MC

MFC=W+L*dW/dL

Therefore, perfect competition, MFC = W imperfect competition MFC > w

3. Principle: MRP=MFC

Third, the demand curve of production factors.

1, the factor market is competitive.

Both producers and suppliers are recipients of W, and W is given (dW/dL=0).

(1) A perfectly competitive product market

P=MR, so VMP=MRP, MFC = W.

Usage principle: VMP = W. The VMP curve is a demand curve.

(2) Incomplete competitive product market (seller's monopoly)

Mr. VMP

Principle of use: MRP = W. MRP is the demand curve.

Summary: As long as the factor market is competitive, there is always a demand curve with a negative slope, the position is affected by the MP of the product price, and the slope is affected by the law of diminishing marginal returns.

2. Imperfect competition in factor market.

The manufacturer is the decider of factor price, DW/DL "0, so there is MFC "w.

(1) A perfectly competitive product market (buyer's monopoly)

Principle: VMP=MFC. There is no demand curve.

(2) Imperfectly competitive market

Principle: MRP=MFC

Summary: If the factor market is not competitive, there will be no factor demand curve.

Chapter IX Supply of Factors

First, the characteristics of factor supply: the total amount is fixed, and the opportunity cost determines the supply.

Second, the principle of factor supply: marginal utility for personal use = marginal utility for market use.

1, marginal utility of market use

MU=W*A (with a representing the marginal utility of money)

2, their own use of marginal utility (completely subjective, personal circumstances are different)

MU=dTU/dL

3. Supply principle: AW=MU

Third, the supply curve-the derivation of indifference curve

1, shape of labor supply curve (reasons for back bending: analysis of substitution effect and income effect)

2. Capital supply curve

If capital is a stock, it is a vertical supply curve.

And here refers to the flow, that is, the difference of capital stock.

3, the supply curve of land (no opportunity cost, can only be used by the market)

Vertical supply curve

Third, the factor price decision.

Pay attention to the meaning of rent: the reward that the supplier gets without affecting the supply. At this time, the price is only determined by the demand.

For example, the original salary was 2000 yuan/month, but now if you change companies, the salary is at least 2000 yuan. 3,000, 4,000, 5,000 and so on. Can make people willing to jump ship. Suppose it is set at 5000 now, then 5000-2000 = 3000 is the economic rent.

Fifth, the analysis of income distribution results.

1, equality: Lorenz curve and Gini coefficient (only remember the conclusion)

2, euler theorem (generally there will be no proof, you can understand): If the enterprise is an industry with constant returns to scale, the distribution will be clean, there will be no surplus, and manufacturers will not have the illusion of exploitation.

Here, we can get an inference: if the enterprise has increasing returns to scale, there will be surplus distribution, so the enterprise will further expand its scale until the returns to scale remain unchanged; On the contrary, it will be scaled down.

Chapter 10 general equilibrium theory

The Concept of General Equilibrium and Its Realization

Pareto Optimality

I. the meaning of p.o.

Second, the realization conditions of purchase orders (within and between two markets)

Third, perfect competition market and monopoly conditions.

These two chapters are basically charts and formulas, so I won't write much here. Please read your own book. The teacher speaks like a book in class. If you don't understand anything, please send it directly to the forum, and students who have taken classes can discuss it together.

Chapter 12 Market Failure and Micro-treatment

1. Reasons for market failure

1 insufficient market: external influence (lack of property rights market)

social product

2 Insufficient competition: production monopoly, information monopoly

3 imperfect system: laws, policies, etc.

Monopoly and its countermeasures

1 reason: P > MC, too little resource allocation.

2 impact: unnecessary losses, social welfare decline

In production, the efficiency is low; Monopoly profit can be regarded as monopoly rent, so enterprises will "rent-seeking" and reduce efficiency.

Rent-seeking is competitive until the monopoly rent is used for rent-seeking.

Solution: legal and administrative intervention, but the effect is not very good.

Third, external influence.

Meaning: the damage or benefit caused by someone's behavior to a non-party cannot be compensated by price.

Impact: private cost is less than social cost, resulting in external diseconomy; Private interests are less than social interests, resulting in external economy.

If private costs