PPT_standard_微观经济学ECON103Ch12

CHAPTER 12 General Equilibrium and the Efficiency of Perfect Competition
General Equilibrium and the Efficiency of Perfect Competition
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Prepared by: Fernando & Yvonn Quijano
General Equilibrium Analysis
Market Adjustment to Changes in Demand
FIGURE 12.2 Adjustment in an Economy with Two Sectors
Initially, demand for X shifts 0 1 from DX to DX. This shift pushes the price of X up to 1 PY creating profits. Demand for Y shifts down 0 1 from DY to DY, pushing the 1 price of Y down to PY and creating losses. Firms have an incentive to leave sector Y and an incentive to enter sector X. Exiting sector Y shifts supply in that industry to S1 , raising Y price and eliminating losses. Entry shifts supply in X to S1 X thus reducing and eliminating profits.
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Principles of Microeconomics 9e by Case, Fair and Oster
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PART II THE MARKET SYSTEM
CHAPTER 12 General Equilibrium and the Efficiency of Perfect Competition
General Equilibrium and the Efficiency of Perfect Competition
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CHAPTER OUTLINE
General Equilibrium Analysis A Technological Advance: The Electronic Calculator Market Adjustment to Changes in Demand Formal Proof of a General Competitive Equilibrium Allocative Efficiency and Competitive Equilibrium Pareto Efficiency The Efficiency of Perfect Competition Perfect Competition versus Real Markets The Sources of Market Failure Imperfect Markets Public Goods Externalities Imperfect Information Evaluating the Market Mechanism
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CHAPTER 12 General Equilibrium and the Efficiency of Perfect Competition
Principles of Microeconomics 9e by Case, Fair and Oster
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CHAPTER 12 General Equilibrium and the Efficiency of Perfect Competition
General Equilibrium Analysis
An Early Technological Advance: The Electronic Calculator
FIGURE 12.1 Cost Saving Technological Change in the Calculator Industry
In the 1970s and 1980s, major technological changes occurred in the calculator industry. In 1975, 18.1 million calculators were sold at an average price of $62. As technology made it possible to produce at lower costs, cost curves shifted downward. As new firms entered the industry and existing firms expanded, output rose and market price dropped. In 1983, 30.9 million calculators were produced and sold at an average price of under $30.
CHAPTER 12 General Equilibrium and the Efficiency of Perfect Competition
Principles of Microeconomics 9e by Case, Fair and Oster
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PART II THE MARKET SYSTEM
CHAPTER 12 General Equilibrium and the Efficiency of Perfect Competition
PowerPoint Lectures for Principles of Microeconomics, 9e
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By Karl E. Case, Ray C. Fair & Sharon M. Oster
© 2009 Pearson Education, Inc. Publishing as Prentice Hall
Principles of Microeconomics 9e by Case, Fair and Oster
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CHAPTER 12 General Equilibrium and the Efficiency of Perfect Competition
General Equilibrium Analysis
Ethanol and Laent provides large subsidies for ethanol, a fuel produced from corn. Proponents of the ethanol subsidies suggest that it is one piece of a policy that can help the United States reduce its dependence on foreign oil. In part as a result of these subsidies, the midwestern United States has seen a large increase in corn production relative to other grains.
General Equilibrium and the Efficiency of Perfect Competition
Input and output markets cannot be considered as if they were separate entities or as if they operated independently. Although it is important to understand the decisions of individual firms and households and the functioning of individual markets, we now need to add it all up, look at the operation of the system as a whole. partial equilibrium analysis The process of examining the equilibrium conditions in individual markets and for households and firms separately. general equilibrium The condition that exists when all markets in an economy are in simultaneous equilibrium.
General Equilibrium Analysis
Formal Proof of a General Competitive Equilibrium
Economic theorists have struggled with the question of whether a set of prices that equates supply and demand in all markets simultaneously can actually exist when there are literally thousands and thousands of markets. If such a set of prices were not possible, the result could be continuous cycles of expansion, contraction, and instability.