Because the prerequisite is that the market is completely competitive and the supply of goods is fixed in the short term, then the supply curve is fixed on the coordinate axis, and the price of goods is only determined by the market demand curve. In the short term, the supply is fixed and the supply curve is fixed.
Microeconomics ("Microeconomics" is a free translation of the Greek word "μ ι κ ρ ο", which originally means "small" and is also called individual economics. Microeconomics is a branch of modern economics, which mainly focuses on a single economic unit (single producer, single consumer, single market economic activity).
Microeconomics is an economic theory that studies the economic behavior of a single economic unit in society and how to determine the individual value of the corresponding economic variables. Analyze the economic behavior of individual economic units, on this basis, study the operation of market mechanism and its role in the allocation of economic resources in modern western economic society, and put forward microeconomic policies to correct market failure; Paying attention to the exchange process between individuals and organizations in society, its basic problem is the decision of resource allocation, and its basic theory is the theory of determining relative prices through supply and demand. Therefore, the main scope of microeconomics includes consumer choice, supplier supply and income distribution.
The construction of consumer behavior in traditional western microeconomics is based on the assumption of maximizing consumer utility. The development of consumption theory research stems from the reflection on this premise.
1. Display preference theory.
The theory of display preference was first put forward by Samuelson, then supplemented by Houthakker and Richter, and gradually became a system. Its appearance stems from the imperceptible utility of traditional demand theory. In the traditional micro-demand theory, the choice behavior of maximizing consumer utility is easy to analyze only when the consumer utility function is known and has good properties. But this is not the case in real life, because the utility or preference can not be directly observed, but only the consumer's choice behavior can be directly observed. If we can find some relationship between choice behavior and preference, and then if consumers' "choice" can show "preference", then demand theory and preference theory can be based on observable consumer behavior, which makes it possible to test the consistency between consumer behavior and maximization axiom. This is the basic idea of display preference theory.
2. Choice under risk conditions.
In the market with a lot of risks, how to effectively choose the combination of asset symptoms to avoid risks becomes very important. Therefore, the research on insurance market, securities market and futures contract has become a very active branch of microeconomic theory. Especially since 1960s and 1970s, with the development of cognitive psychology and other branches of psychology, people began to test the rational hypothesis and expected utility theory of classical economics. The results show that the rational axiom hypothesis is established under certain conditions, and people's behavior often violates the public rational hypothesis under vague or uncertain conditions. Therefore, when making decisions under uncertain conditions, we must examine people's complex mentality. In this case, there are wait-and-see theory, regret theory and fuzzy model. When it comes to portfolio decision-making in the market, there are risk asset theory (derivative securities), agency theory, portfolio selection theory, capital asset pricing model and arbitrage pricing theory. Corresponding to this theory is the intertemporal choice theory that explains consumers' different choices of consumption and savings under different conditions. Dynamic intertemporal selection theory has been widely used in modern economics.
3. Consumption is also the theory of family production.
Becker believes that the family is similar to a small factory, which combines "capital goods, raw materials and labor to produce some other useful goods". According to this broader view, consumers in neoclassical microeconomics are both family consumers and family producers, and they have dual roles. It is believed that the production and consumption of goods (in Becker's model, children are sometimes regarded as consumer goods) take time. Time is an opportunity cost, which must be calculated together with the market price of any goods or the act of making economic decisions. Just as raising children requires human resources, capital and time, the production and consumption of any final commodity or service can be regarded as a combination of various inputs needed to obtain an output. For example, a person's final product obtained in family production, such as "healthy body" (in the new microeconomic theory represented by Becker, consumption is regarded as family production), requires a combination of many "market goods" (goods directly purchased by consumers in the market) and time investment. Sports equipment, various healthy foods, medical services, and the time spent on sports and the time needed to consume these items are all inputs for the production of this final product. Individuals or families convert these inputs into outputs (including children's growth, comfortable family life, healthy body, spiritual pleasure, etc.). ), that is, the family's production or consumption process, embodies a production function.
Just as general production enterprises should consider the opportunity cost of applying production factors when optimizing production, so they should also consider the opportunity cost of applying various factors when optimizing family production. For example, watching a play, reading a book and eating a good meal all take time (these can be regarded as input factors in family production), so the full price of these behaviors must include the opportunity cost of the time spent on these behaviors. This opportunity cost can be measured according to the individual's market wage. For example, suppose someone can earn 10 dollars for an hour's work, and he will either eat in a restaurant for an hour or eat fast food for 15 minutes. Suppose the cost of these two dining methods is 6 yuan. Although the two meals need the same monetary cost, the full price they consume is obviously different. The full price of fast food consumption is $8.50 ($6 plus forgone income of $2.50), while the full price of dining in a restaurant is $65,438+06 ($6 plus forgone income of $65,438+00). The decisive factor of an individual's final choice will be the utility of each dollar spent on each meal (full cost) (that is, the value of products produced by the family). Other values of family production, such as having children, doing all kinds of housework and maintaining activities, can also be expressed by the concept of opportunity cost. Similarly, when time cost and market commodity cost are treated equally, the traditional choice between work and leisure is injected with new ideas and becomes the choice between work, leisure and family production. In addition, according to the concepts of quality and quantity, a new concept of household consumption type can be established. "