范里安微观经济学英文课件.ppt

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1、ChapterFourUtilityPreferences-AReminderxy:xispreferredstrictlytoy.x~y:xandyareequallypreferred.xy:xispreferredatleastasmuchasisy.p~fPreferences-AReminderCompleteness:Foranytwobundlesxandyitisalwayspossibletostateeitherthatxyorthatyx.~f~fPreferences-AReminderReflexivity

2、:Anybundlexisalwaysatleastaspreferredasitself;i.e.xx.~fPreferences-AReminderTransitivity:Ifxisatleastaspreferredasy,andyisatleastaspreferredasz,thenxisatleastaspreferredasz;i.e.xyandyzxz.~f~f~fUtilityFunctionsApreferencerelationthatiscomplete,reflexive,transitiveandcon

3、tinuouscanberepresentedbyacontinuousutilityfunction.Continuitymeansthatsmallchangestoaconsumptionbundlecauseonlysmallchangestothepreferencelevel.UtilityFunctionsAutilityfunctionU(x)representsapreferencerelationifandonlyif:x’x”U(x’)>U(x”)x’x”U(x’)

4、”).~fppUtilityFunctionsUtilityisanordinal(i.e.ordering)concept.E.g.ifU(x)=6andU(y)=2thenbundlexisstrictlypreferredtobundley.Butxisnotpreferredthreetimesasmuchasisy.UtilityFunctions&Indiff.CurvesConsiderthebundles(4,1),(2,3)and(2,2).Suppose(2,3)(4,1)~(2,2).Assigntothesebun

5、dlesanynumbersthatpreservethepreferenceordering;e.g.U(2,3)=6>U(4,1)=U(2,2)=4.Callthesenumbersutilitylevels.pUtilityFunctions&Indiff.CurvesAnindifferencecurvecontainsequallypreferredbundles.Equalpreferencesameutilitylevel.Therefore,allbundlesinanindifferencecurvehavethesa

6、meutilitylevel.UtilityFunctions&Indiff.CurvesSothebundles(4,1)and(2,2)areintheindiff.curvewithutilitylevelUº4Butthebundle(2,3)isintheindiff.curvewithutilitylevelUº6.Onanindifferencecurvediagram,thispreferenceinformationlooksasfollows:UtilityFunctions&Indiff.CurvesUº6Uº4(2

7、,3)(2,2)~(4,1)x1x2pUtilityFunctions&Indiff.CurvesAnotherwaytovisualizethissameinformationistoplottheutilitylevelonaverticalaxis.U(2,3)=6U(2,2)=4U(4,1)=4UtilityFunctions&Indiff.Curves3Dplotofconsumption&utilitylevelsfor3bundlesx1x2UtilityUtilityFunctions&Indiff.CurvesThis3

8、Dvisualizationofpreferencescanbemademoreinformativebyaddingintoitthetwoindifferencecurves.Utilit