[经济学]6三2supply and demand

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1、SupplyandDemand:TheMarketMechanism(2)WordsIncentiveexternalaltruistmotivationutilizecorefavorinterfereembedUnderlyingapproachvariableinitialArcmagnitudeasymmetryinfinitesimalInfinitecontemplatehikelicensevanityPermanenttemporaryAllsocietiesnecessarilymakeeconomicchoices.Societyneedstom

2、akechoicesabout,whatshouldbeproduced,howshouldthosegoodsandservicesbeproduced,andwhomisallowedtoconsumesthosegoodsandservices.Forconventionaleconomicsthemarketbywayoftheoperationofsupplyanddemandanswerthesequestions.Underconditionsofcompetition,wherenoonehasthepowertoinfluenceorsetpric

3、e,themarket(everyone,producersandconsumerstogether)determinesthepriceofaproduct,andthepricedetermineswhatisproduced,andwhocanaffordtoconsumeit.Priceprovidestheincentivetoboththeconsumerandproducer.Highpricesencouragedmoreproductionbytheproducers,butlessconsumptionbytheconsumers.Lowpric

4、esdiscourageproductionbytheproducer,andencouragedconsumptionbytheconsumers.Bothincentivespushthepricetobalancetheforcesofconsumption(demand)andproduction(supply).Economistscallthisbalance:equilibrium.Thisnaturalmechanismrequiresnoexternalinstitutionfordirection(oronlyaminimumamount),or

5、anyaltruists’motivationbyeithertheconsumersortheproducers.Thesupplyanddemandmechanism(theeconomicmodel)besidesbeingthenaturalconsequencesofeconomicforcesprovidesthemostefficienteconomicoutcomespossible.Satisfactionforsocietyismaximized,atminimumcost.Themarketmechanism’sefficiencyoutcom

6、eisalwayslocatedontheproductionpossibilitycurvesfrontier,whereallresourcesarefullyutilized(pointswithintheproductionpossibilitycurvesareinefficientbydefinition,sinceresourcesarenotbeingutilized).Thiscoremodelofsupplyanddemandexplainswhyeconomistsusuallyfavormarketresults,andseldomwishe

7、stointerferewithprice.Settingminimumwages,forinstance,orinterferingwithtrade,violatethespiritofthemodel,andleadtoinefficientoutcomes.AlternativeViewpointsTherearealternativeviewpoints,however,thatquestionjusthowefficientandnaturalthemarketmechanismis.Theyarguethatactualmarketsinanyso