1、Chapter NineBuying and SellingWhat Are We Doing in this Chapter?u We expand our basic consumer choice framework to include the possibility that consumers can sell something to generate income.u Again,in terms of theoretical framework,nothing is new.Endowments 禀赋uThe list of resource units with which
2、 a consumer starts is his endowment.uA consumers endowment will be denoted by the vector (omega).EndowmentsuE.g.states that the consumer is endowed with 10 units of good 1 and 2 units of good 2.uWhat is the endowments value?uFor which consumption bundles may it be exchanged?(,)(,)1210 2Budget Constr
3、aints RevisiteduSo,given p1 and p2,the budget constraint for a consumer with an endowment isuThe budget set is(,)12p xp xpp1 12 21 122 .(,),.xxp xp xppxx121 12 211221200 Budget Constraints Revisitedx2x1 1 1 2 2p xp xpp1 12 21 122 Budget set (,),xxp xp xppxx121 12 211221200 Budget Constraints Revisit
4、edx2x1 1 1 2 2p xp xpp1 12 21 122 p xp xpp1 12 21 122 Budget setBudget Constraints Revisitedx2x1 1 1 2 2p xp xpp1 12 21 122 The endowment point is always on the budget constraint.p xp xpp1 12 21 122 So price changes pivot theconstraint about the endowment point.Budget Constraints RevisiteduThe const
5、raintisuThat is,the sum of the values of a consumers net demands is zero.pxpx1112220()().p xp xpp1 12 21 122 Net Demandsx2x1 1 1 2 2pxpx1112220()()x2*x1*At prices(p1,p2)the consumersells units of good 1 to acquiremore units of good 2.Net Demandsx2x1pxpx1112220()()x2*=2 2x1*=1 1At prices(p1”,p2”)the
6、consumerconsumes her endowment;netdemands are all zero.p xp xpp1 12 21122 Net Demandsx2x1 1 1 2 2pxpx1112220()()Price-offer curve contains all theutility-maximizing gross demands for which the endowment can be exchanged.A Variation of the Theme:Income from LaboruA worker is endowed with$m of nonlabo
7、r income and R hours of time which can be used for labor or leisure.=(R,m).uConsumption goods price is pc.uw is the wage rate.Labor SupplyuThe workers budget constraint iswhere C,R denote gross demands for the consumption good and for leisure.That isp Cw RRmc ()p CwRwRmc endowment valueexpenditureLa
8、bor SupplyCRRendowmentm($)Labor SupplyCRRendowmentCwpRmwRpcc mwRpc mLabor SupplyCRRendowmentCwpRmwRpcc mwRpc mslope=,the real wage rate wpcLabor SupplyCRRendowmentCwpRmwRpcc mwRpc mC*R*leisuredemanded laborsuppliedThe Morale of the Story:Limited Possibility of Market TransactionsuThere are some case
9、s in which a good cannot be sold or bought in any amount!Slutskys Equation RevisiteduSlutsky:changes to demands caused by a price change are the sum of a pure substitution effect,and an income effect.uThis assumed that income y did not change as prices changed.But does change with price.How does thi
10、s modify Slutskys equation?ypp 1 122 Slutskys Equation RevisiteduA change in p1 or p2 changes so there will bean additional income effect,called the endowment income effect.uSlutskys decomposition will thus have three componentsa pure substitution effectan(ordinary)income effect,andan endowment inco
11、me effect.ypp 1 122 Slutskys Equation Revisitedx1 2 1x2x2x1Initial prices are(p1,p2).Slutskys Equation Revisitedx1 2 1x2x2x1”x2”Initial prices are(p1,p2).Final prices are(p1”,p2”).How is the change in demandfrom(x1,x2)to(x1”,x2”)explained?x1Slutskys Equation Revisitedx1 2 1x2x2x1Initial prices are(p
12、1,p2).Slutskys Equation Revisitedx1 2 1x2x2x1”x2”Initial prices are(p1,p2).Final prices are(p1”,p2”).x1Slutskys Equation Revisitedx1 2 1x2Pure substitution effectSlutskys Equation Revisitedx1 2 1x2Pure substitution effectSlutskys Equation Revisitedx1 2 1x2Pure substitution effectOrdinary income effe
13、ctSlutskys Equation Revisitedx1 2 1x2Pure substitution effectOrdinary income effectSlutskys Equation Revisitedx1 2 1x2Pure substitution effectOrdinary income effectEndowment income effectSlutskys Equation Revisitedx1 2 1x2Pure substitution effectOrdinary income effectEndowment income effectSlutskys Equation RevisitedOverall change in demand caused by achange in price is the sum of:(i)a pure substitution effect(ii)an ordinary income effect(iii)an endowment income effect一个经典例子白居易卖炭翁可怜身上衣正单，心忧炭贱愿天寒。
