Revision of MicroeconomicsContents • Consumer Surplus • Producer Surplus • Social Surplus/Net Welfare 2 Consumer Surplus Consumer Surplus • Welfare economics well-being • Willingness to
Trang 1Lecture 0 Revision of Microeconomics
Contents
• Consumer Surplus
• Producer Surplus
• Social Surplus/Net Welfare
2
Consumer Surplus
Consumer Surplus
• Welfare economics
well-being
• Willingness to pay
• Consumer surplus
4
Four possible buyers’ willingness to pay
5
Tý Sửu Dần Mão
$100 80 70 50
Table 1
Consumer Surplus
• Using the demand curve to measure consumer surplus
buyers
– Willingness to pay of the marginal buyer
6
Trang 2The demand schedule
7 The table shows the demand schedule for the buyers in Table 1
Quantity Demanded More than $100
$80 to $100
$70 to $80
$50 to $70
$50 or less
None Tý
Tý, Sửu
Tý, Sửu, Dần
Tý, Sửu, Dần, Mão
0 1 2 3 4
Table 2
$100 80
50
Price of Albums The demand curve
8 The graph shows the corresponding demand curve Note that the height of the demand curve reflects buyers’ willingness to pay
Quantity of Albums
Tý’s willingness to pay Sửu’s willingness to pay Dần’s willingness to pay
Mão’s willingness to pay
Demand Figure 1
Consumer Surplus
• Using the demand curve to measure
consumer surplus
• Demand curve
• Consumer surplus in a market
9
$100 80
50
Price of Albums
Measuring consumer surplus with the demand curve Figure 2
10
In panel (a), the price of the good is $80, and the consumer surplus is $20 In panel (b), the price of the good is $70, and the consumer surplus is $40.
Quantity of Albums
Tý’s consumer surplus ($20)
Demand
(a) Price = $80
$100 80
50
Price of Albums
Quantity of Albums
Tý ’s consumer surplus ($30) (b) Price = $70
Sửu ’s consumer surplus ($10)
Total consumer surplus ($40) Demand
Consumer Surplus
• How a lower price raises consumer surplus
• Buyers - always want to pay less
–Initial price, P1
•Quantity demanded Q1
•Given consumer surplus
–New, lower price, P2
•Greater quantity demanded, Q2 – New buyers
•Increase in consumer surplus
– From initial buyers – From new buyers
11
How the price affects consumer surplus Figure 3
12
Price
In panel (a), the price is P 1 , the quantity demanded is Q 1 , and consumer surplus equals the area of the triangle ABC When the price falls from P 1 to P 2 , as in panel (b), the quantity demanded rises from Q 1 to Q 2 , and the consumer surplus rises to the area of the triangle ADF The increase in consumer surplus (area BCFD) occurs
in part because existing consumers now pay less (area BCED) and in part because new consumers enter the market at the lower price (area CEF).
(a) Consumer surplus at price P 1 (b) Consumer surplus at price P 2
Demand
P 1
Q 1
Consumer surplus
B C
A
Price
Demand
P 1
Q 1
Initial consumer surplus
A
P 2
Q 2
B
D C
E F
Additional consumer surplus to initial consumers Consumer surplus
Trang 3Consumer Surplus
• Consumer surplus measures the amount that
consumers gain from purchases by the difference in
the price that each pays from the maximum price
each would be willing to pay.
determined by a demand (willingness to buy) function
decreases as well as the consumer surplus
Fig 8-7: Geometry of Consumer Surplus
Producer Surplus
Consumer Surplus
• What does consumer surplus measure?
• Consumer surplus
–Benefit that buyers receive from a good
•As the buyers themselves perceive it
–Good measure of economic well-being –Exception: Illegal drugs
•Drug addicts
– Willing to pay a high price for heroin
•Society’s standpoint
– Drug addicts don’t get a large benefit from being able to buy heroin at a low price
16
Producer Surplus
• Cost and the willingness to sell
• Cost
produce a good
• Producer surplus
17
The costs of four possible sellers Table 3
18
Giáp Ất Bính Đinh
$900 800 600 500
Trang 4Producer Surplus
• Using the supply curve to measure producer
surplus
– Cost of the marginal seller
19
The supply schedule Table 4
20 The table shows the supply schedule for the sellers in Table 3
Quantity Supplied
$900 or more
$800 to $900
$600 to $800
$500 to $600 Less than $500
Giáp, Ất, Bính, Đinh
Ất, Bính, Đinh Bính, Đinh Đinh None
4 3 2 1 0
The supply curve
Figure 4
21
$900
800
600
Price of
House
Painting
The graph shows the corresponding supply curve Note that the
height of the supply curve reflects sellers’ costs.
Quantity of Houses Painted
Giáp’s cost Ất’s cost Bính’s cost Đinh’s cost
Supply
Producer Surplus
• Using the supply curve to measure producer surplus
• Supply curve
• Producer surplus in a market
22
$900 800 600 500
Price of House Painting
Measuring producer surplus with the supply curve
Figure 5
23
$900
800
600
500
Price of
House
Painting
In panel (a), the price of the good is $600, and the producer surplus is $100.
In panel (b), the price of the good is $800, and the producer surplus is $500.
Quantity of Houses Painted
Đinh’s producer surplus ($100)
Supply (a) Price = $600 (b) Price = $800
Supply
Đinh’s producer surplus ($300)
Bính’s producer surplus ($200) Total producer
Quantity of Houses Painted
Producer Surplus
• How a higher price raises producer surplus
• Sellers - want to receive a higher price
–Initial price, P1
•Quantity supplied, Q1
•Given producer surplus
–New, higher price, P2
•Greater quantity supplied, Q2
– New producers
•Increase in producer surplus
– From initial suppliers – From new suppliers
24
Trang 5How the price affects producer surplus
Figure 6
25
Price
In panel (a), the price is P 1 , the quantity supplied is Q1, and producer surplus equals the area of the triangle
ABC When the price rises from P 1 to P 2 , as in panel (b), the quantity supplied rises from Q 1 to Q 2 , and the
producer surplus rises to the area of the triangle ADF The increase in producer surplus (area BCFD) occurs
in part because existing producers now receive more(area BCED) and in part because new producers enter
the market at the higher price (area CEF).
(a) Producer surplus at price P 1 (b) Producer surplus at price P 2
Supply
P 1
Q 1
Producer
surplus
B
C
A
Price
Supply
P 1
Q 1
Initial consumer surplus
A
P 2
Q 2
B D
C
E F
Additional producer surplus to initial producers
Producer surplus
to new producers
Copyright © 2009 Pearson Add
8-26
Producer Surplus
• Producer surplus measures the amount that
producers gain from a sale by the difference in the price each receives from the minimum price each would be willing to sell at.
determined by a supply (willingness to sell) function
well as the producer surplus
Fig 8-8: Geometry of Producer Surplus
Social Surplus/ Total Surplus
Market Efficiency
• The benevolent social planner
surplus
buyers
sellers
29
Consumer and producer surplus in the market equilibrium
Figure 7
30
Price
Total surplus—the sum of consumer and producer surplus—is the area between the supply and demand curves up to the equilibrium quantity.
quantity
Equilibrium price
Demand
Supply
Consumer surplus Producer surplus
B
C
A
D
E
Trang 6Phân tích chính sách
Trước khi có chính sách
Sau khi có chính sách
Chênh lệch (Δ)
-Thặng dư tiêu
dùng (CS)
Thặng dư sản
xuất (PS)
Tiền thuế chính
phủ thu (G)
Tổng phúc lợi
xã hội (SS/NW)