3rd Day       January  8th     P33~54

Chapter 3 PREFERENCES

Consumer Preferences is an importantconception. There are three axioms(定理) about consumer preference—— Complete. Reflxive. Transitive.(完备性、反身性、传递性)

It is easy to get Indifference Curves andMRS after we know how to compare the Preferences. I have learn to much about thissection in our class. However, I found one kind of Indifference Curves I havenot seen before, and I want to share this with you! That is “Satiatedpreferences”(饱和型偏好)

After that, I read about the “Well-BehavedPreferences”, that is something like monotonicity of preferences(偏好的单调性)，concave preferences(凹偏好). But I found it also have Concavepreferences！(凸偏好)

今天的阅读材料（原书P43）如下：目标是理解“饱和型偏好”，“凸偏好”，欢迎发言！

If you think about it, most goods are likechocolate cake and ice cream in this respect—you can have too much of nearlyanything. But people would generally not voluntarily choose to have too much ofthe goods they consume. Why would you choose to have more than you want ofsomething? Thus the interesting region from the viewpoint of economic choice iswhere you have less than you want of most goods (x1,x2). The choices thatpeople actually care about are choices of this sort, and these are the choiceswith which we will be concerned.

以下为翻译，鼠标选择反白可见，来自曹乾老师的翻译电子档。

     如果你仔细想想，现实生活中绝大多数的商品都类似于这里的巧克力蛋糕和冰淇淋。但是人们一般不会自愿选择过多消费某种商品。如果你想要商品的数量为(x1,x2)，你何必多要？因此，从消费者行为理论的角度来看，应该重点关注的区域是两种商品分别小于最优数量(x1,x2)的区域。人们实际关注的选择就是这样的情形，这也是我们所要研究的情形。

Can you think of preferences that are notconvex? One possibility might be something like my preferences for ice creamand olives. I like ice cream and I like olives ... but I don’t like to havethem together! In considering my consumption in the next hour, I might be indifferent between consuming 8 ounces of ice cream and 2 ounces ofolives, or 8 ounces of olives and 2 ounces of ice cream. But either one ofthese bundles would be better than consuming 5 ounces of each! These are thekind of preferences depicted in Figure 3.10C.

以下为翻译，鼠标选择反白可见，来自曹乾老师的翻译电子档。

你能想出非凸偏好的例子吗？我举个例子，比如我对冰淇淋和橄榄的偏好。我喜欢吃冰淇淋也喜欢吃橄榄，但我不喜欢把它们放在一起吃！我打算一个小时后吃点东西，8 单位冰淇淋和 2 单位的橄榄，或者 2 单位的冰淇淋和 8单位的橄榄，这两种选择对我来说是无差异的。但这两个消费束都不如5单位的冰淇淋和5单位的橄榄。我的这种偏好类型可用图3.10C表示。

4th   January 9, 2012   P54~72

CHAPTER 4     UTILITY

      “Utility is simply a way of describingpreferences.” I think it got the point. The only property of a utilityassignment that is important is how it orders the bundles of goods.

      It seems that this book does not emphasizethe difference between cardinal utility（基数效用）and ordinal utility（序数效用）.This is important in Gao’s book (高鸿业微观经济学) But the monotonic transformation(单调变换) is an intersecting thing inthe practice. We’ll mention it later on.

       You must know how to draw indifference curves from a utility function. However, do you know how to constructa utility function from indifferencecurves?

        ---> One easy way is to draw the diagonal line illustrated and label each indifference curve with its distance from the origin measured along the line.

I think this is a very novel approach~~~~

     It also gives some examples of utility functionssuch as Perfect Complements, Quasilinear Preferences and Cobb-DouglasPreferences.P59

     Solving for the slope of the indifference curve we have:

      However, it gets very tedious to keep trackof that pesky minus sign, so economists often refer to the MRS by its absolutevalue !

      In the end , it give an example of application：Utility for Commuting. It very easybut useful.

      For more Mathematical derivation, you canread the APPENDIX for this chapter. P70

      It gives me a new way to solve the problemof Cobb-Douglas Preferences ! I think the key idea of this approach is the monotonictransformation(单调变换). Afterwe use the transformation that f[·]=ln(), the function will be more easy to deal with!!!