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1、Lesson1:UtilityMankiw,pp.460–464Economicsis……thestudyoftheproduction,distribution,andconsumptionofgoodsandservices.…thestudyofthedivisionoffiniteresourcesgiveninfinitewants…awayofmathematicallymodelinghappinessRecentpapersineconomics(fromAmericanEconom
2、icReview,September2009)“CanNewsabouttheFutureDrivetheBusinessCycle?”“WhyDoSellers(Usually)PreferAuctions?”“SpousalControlandIntra-HouseholdDecisionMaking:AnExperimentalStudyinthePhillipines”Recentpapers“OneChanceinaMillion:AltruismandtheBoneMarrowRegis
3、try”“TheEffectsofHighStakesHighSchoolAchievementAwards:EvidencefromaRandomizedTrial”BranchesofEconomicsMicroeconomicsisthestudyofhowhouseholdsandfirmsmakedecisionsandhowtheyinteractinspecificmarkets.Macroeconomicsisthestudyoftheeconomyatthecommunity,na
4、tional,regional,orworldlevel.BranchesofEconomicsEconometricsistheapplicationofstatisticstothestudyofeconomicphenomenaEconomicsConceptsNormativeeconomicsisthestudyofhoweconomicsystemsare.Positiveeconomicsiseconomicanalysiswhichmakesorsupportspolicyrecom
5、mendationsEconomicsconceptsAclosedeconomyisaneconomywhichdoesnotinteractwithothereconomiesoutsideitself.Anopeneconomyisaneconomywhichdoes.UtilityTheoryUtilityisthedegreeofapreferenceanindividualassignstoastate.IfsituationAispreferredtoB,wesaythatAoffer
6、sahigherutilitythanB.Agoodissomethingwhichincreasesutility.Abadissomethingwhichdecreasesutility.UtilitynotationCeterisParibusInreallife,aperson’sutilityisafunctionofatleastthousandsoffactors.Economicsproblemsaregenerallystudiedceterisparibus,whichmeans
7、“everythingelsebeingequal”AssumptionsofUtilityTheoryPeoplearerational–theyoptimallyusealltheinformationtheyhavetomaximizeutility.AssumptionsCompleteness–Givenanytwosituations,anindividualcanspecifywhichispreferredtotheother,orthatsheisindifferentbetwee
8、nthetwo.AssumptionsTransitivity–IfAispreferredtoB,andBispreferredtoC,thenAispreferredtoC.Continuity–IfAispreferredtoB,thensituations“closeto”AarepreferredtoB.Monotonicityg(x)isamonotonictransformationoff(x)if,forallx1andx2,f(x1)<,=,>f(x
