平狄克[微观经济学]课后答案

PART I

INTRODUCTION

MICROECONOMICS AND MARKETS

CHAPTER 1

PRELIMINARIES

The first two chapters reacquaint students with the microeconomics that they learned in their introductory course: Chapter 1 focuses on the general subject of economics, while Chapter 2 develops supply and demand analysis. The distinction between competitive and non-competitive markets provides an overview of the course. We assume competitive markets in Parts I and II (through Chapter

9), then discuss market power in Part III and its consequences in Part IV.

The use of examples in Chapter 1 facilitates students’ complete understanding of abstract economic concepts. Examples in this chapter discuss models of unemployment (Section 1.2), introduction of a new automobile (Section 1.3), design of automobile emission standards (Section 1.3), and real and nominal prices of eggs and education (Section 1.5).

Review Question (3) illustrates the difference between positive and normative economics and provides for a productive class discussion. Other examples for discussion are available in Kearl, Pope, Whiting, and Wimmer, “A Confusion of Economists,” American Economic Review (May 1979).

The chapter concludes with a discussion of real and nominal prices. Given our reliance on dollar prices in the chapters that follow, students should understand that we are concerned with prices relative to a standard, which in this case is dollars for a particular year.

1. What is the difference between a market and an industry? Are there interactions among firms in different industries that you might describe as taking place within a single market?

An industry represents a collection of suppliers operating in a particular market. Many

industries may participate in a given market. For example, the food market brings

together suppliers from the beef, dairy, and grain industries, distributors providing

services, manufacturers of packaged foods, restaurants selling prepared foods, and

consumers.

2. It is often said that a good theory is one that can, in principle, be refuted by an empirical, data-oriented study. Explain why a theory that cannot be evaluated empirically is not a good theory.

There are two steps in evaluating a theory: first, you should examine the reasonability

o f the theory’s assumptions; second, you should test the theory’s predictions by

comparing them with facts. If a theory cannot be tested, it cannot be accepted or

rejected. Therefore, it contributes little to our understanding of reality.

3. Which of the following two statements involves positive economic analysis and which normative? How do the two kinds of analysis differ?

a. Gasoline rationing (allocating each year to each individual an annual maximum

amount of gasoline that can be purchased) is a poor social policy because it interferes with the workings of the competitive market system.

Gasoline rationing is a policy under which more people are made worse off than are made better off. b.

Positive economic analysis describes what is. Normative economic analysis describes

what ought to be. We know from economic analysis that a constraint placed on supply

will change the market equilibrium. Statement (a) merges both types of analysis.

First, statement (a) makes a positive statement that gasoline rationing “interferes with

the workings of the competitive market system.” Second, by making the normative

statement (i.e., a value judgment) that gasoline rationing is a “poor social policy,”

statement (a) confines itself to a conclusion derived from positive economic analysis of

the policy.

Statement (b) is positive because it states what the effect of gasoline rationing is

without making a value judgment about the desirability of the rationing policy.

4. Suppose the price of unleaded regular octane gasoline were 20 cents per gallon higher in New Jersey than in Oklahoma. Do you think there would be an opportunity for arbitrage (i.e., that firms could buy gas in Oklahoma and then sell it at a profit in New Jersey)? Why or why not?

Oklahoma and New Jersey represent separate geographic markets for gasoline because

of high transportation costs. If transportation costs were zero, a price increase in New

Jersey would prompt arbitrageurs to buy gasoline in Oklahoma and sell it in New

Jersey. It is unlikely in this case that the 20 cents per gallon difference in costs would

be high enough to create a profitable opportunity for arbitrage, given both transactions

costs and transportation costs.

5. In Example 1.1, what economic forces explain why the real price of eggs has fallen while the real price of a college education has increased? How have these changes affected consumer choices?

The price and quantity of goods (e.g., eggs) and services (e.g., a college education) are

determined by the interaction of supply and demand. The real price of eggs fell from

1970 to 1985 because of either a reduction in demand (consumers switched to lower-

cholesterol food), a reduction in production costs (improvements in egg production

technology), or both. In response, the price of eggs relative to other foods decreased.

The real price of a college education rose because of either an increase in demand (e.g.,

more people recognized the value of an education), an increase in the cost of education

(e.g., increase in staff salaries), or both.

6. Suppose that the Japanese yen rises against the U.S. dollar; that is, it now takes more dollars to buy any given amount of Japanese yen. Explain why this simultaneously increases the real price of Japanese cars for U.S. consumers and lowers the real price of U.S. automobiles for Japanese consumers.

As the value of the yen grows relative to the dollar (and if the costs of production for

both Japanese and U.S. automobiles remain unchanged), more dollars exchange for

fewer yen. In response to the change in the exchange rate, the purchase of a Japanese

automobile priced in yen requires more dollars. Similarly, the purchase of a U.S.

automobile priced in dollars requires fewer yen.