1. 1. economic man

People engaged in economic activities take economic actions in order to obtain the maximum economic benefits with the minimum economic cost.

1.2. Demand

The quantity of goods that consumers are willing and able to buy at various possible price levels in a certain period of time.

1.3. Demand function

A function that expresses the relationship between commodity demand and various factors affecting demand.

1.4. Supply

Producers are willing and able to provide the sales quantity of this commodity at various price levels within a certain period of time.

1.5. Supply function

The supply function indicates that there is a one-to-one correspondence between the supply of a commodity and the price of the commodity.

1.6. Balanced price

The equilibrium price of commodities refers to the price when the market demand and supply of commodities are equal.

1.7. Changes in demand and changes in demand

The change of demand refers to the change of commodity demand caused by the change of commodity price when other conditions remain unchanged. The change of demand refers to the change of commodity demand caused by the change of other factors under the condition that commodity prices remain unchanged.

1.8. Changes in supply and changes in supply

The change of supply refers to the change of commodity supply caused by the change of commodity price when other conditions remain unchanged. The change of supply refers to the change of commodity supply caused by the change of other factors under the condition of constant commodity prices.

1.9. Endogenous variables and exogenous variables

Endogenous variables refer to variables determined by economic models. Exogenous variables refer to known variables determined by factors outside the model.

1. 10. Static analysis

An analysis method of obtaining endogenous variable values according to the established exogenous variable values.

1. 1 1. Comparative static analysis

Study the influence of exogenous variables on endogenous variables, and analyze and compare the different values of endogenous variables under exogenous variables with different values.

1. 12. Dynamic analysis

It is necessary to distinguish the differences of variables in time and study the relationship between variables at different time points.

1. 13. Elasticity

When one economic variable changes 1%, the percentage of another economic variable changes caused by it.

1. 14. Arc elasticity

Indicates the degree of response of demand change between two points on the commodity demand curve to price change.

1. 15. point elasticity

Indicates the reaction degree of demand change at a certain point on the demand curve to price change.

1. 16. Price elasticity of demand

It indicates the response degree of the demand change of a commodity to the price change of the commodity in a certain period of time. In other words, it represents the percentage of change in demand for a commodity caused by one percent price change in a certain period.

1. 17. Supply price elasticity

Indicates the degree of response of the supply change of a commodity to the price change of the commodity in a certain period of time. In other words, it represents the percentage change in the supply of a commodity caused by a one percent price change in a certain period.

1. 18. Cross-price elasticity of demand

It indicates the reaction degree of the demand change of a commodity relative to the price change of its related commodities in a certain period. In other words, it represents the percentage change of demand for another commodity caused by a one percent price change in a certain period.

1. 19. Substitution

If two kinds of goods can replace each other and satisfy a certain desire of consumers, it is said that there is a substitution relationship between the two kinds of goods, and the two kinds of goods are mutually substituted.

1.20. Complementary products

If two commodities must be used at the same time to satisfy a certain desire of consumers, then it is said that there is a complementary relationship between the two commodities, and the two commodities are complementary to each other.

1.2 1. Income elasticity of demand

The income elasticity of demand indicates the reaction degree of the change of consumer's demand for a certain commodity to the change of consumer's income in a certain period. In other words, it represents the percentage of changes in commodity demand caused by changes in consumer income 1% in a certain period.

1.22. Engel's law

In a family or a country, the proportion of food expenditure in income decreases with the increase of income, which can be expressed by the concept of elasticity: for a family or a country, the higher the wealth level, the smaller the income elasticity of food expenditure; On the contrary, the bigger.

1.23. Utility

Utility refers to the ability of goods to satisfy people's desires, or, utility refers to the degree of satisfaction that consumers feel when they consume goods.

1.24. radix utility

The unit of measurement representing the size of utility is called utility unit.

1.25. Ordinal utility

The magnitude of utility can't be measured concretely, and the comparison between utilities can only be made by order or grade.

1.26. Marginal quantity

The amount of change of the dependent variable caused by the change of the independent variable of a unit.

1.27. Total utility and marginal utility

Total utility refers to the sum of the utilities obtained by consumers who consume a certain number of goods in a certain period of time. Marginal utility refers to the utility increment that consumers get by increasing the consumption of one unit of goods in a certain period of time.

1.28. Consumer equilibrium

Consumer equilibrium is to study how a single consumer distributes limited monetary income when purchasing various commodities, so as to obtain the maximum utility.

1.29. Consumer surplus

Consumer surplus is the difference between the highest total price that consumers are willing to pay and the total price actually paid when buying a certain amount of goods.

1.30. Indifference curve

The indifference curve is used to represent all combinations of two commodities with the same consumer preference. In other words, he refers to all combinations of two commodities, which can bring the same level of utility or satisfaction to consumers.

1.3 1. Marginal substitution rate of commodities

On the premise of maintaining the same utility level, the marginal substitution rate of goods is called the consumption quantity of another commodity that consumers need to give up every time they increase the consumption quantity of one unit of goods.

1.32. Budget item

Budget line is also called budget constraint line, consumption possibility line and price line. The budget line represents various combinations of two commodities that consumers can buy with all their income under the given conditions of consumer income and commodity price.

1.33. Substitution

The change of commodity price causes the change of commodity relative price, and then the change of commodity relative price causes the change of commodity demand, which is called substitution effect.

1.34. The obtained effect

The change of real income level caused by the change of commodity price, and then the change of commodity demand caused by the change of real income level is called income effect.

1.35. General project

Normal commodities refer to commodities whose demand and income change in the same direction. For normal commodities, the substitution effect and price change in the opposite direction, and the income effect also changes in the opposite direction. Under the joint action of them, the total utility will inevitably change in the opposite direction to the price. Because of this, the demand curve of normal commodities is inclined to the lower right.

1.36. Low-grade goods

Low-grade goods refer to goods whose demand and income change in opposite directions. For low-grade goods, the substitution effect is opposite to the price change direction, and the income effect is the same as the price change direction. Moreover, in most cases, the income effect is less than the substitution effect, so the total utility and the price change in the opposite direction. The corresponding demand curve is inclined to the lower right.

1.37. Good Ji Fen.

Giffin commodity is a special low-grade commodity. As a low-grade commodity, the substitution effect of Giffin commodity changes in the opposite direction to the price. The particularity of Ji Fen is that its income effect exceeds the substitution effect, so that the total effect changes in the same direction as the price. This is also the reason why Giffin's commodity demand curve is inclined to the upper right.

1.38. Expected benefit

The expected utility of consumers is the weighted average of the utility of various results that consumers may get under uncertain conditions.

1.39. Not sure

Uncertainty means that economic actors can't know the result of their own decisions accurately in advance. In other words, as long as the decision of economic actors has more than one possible outcome, uncertainty will arise.

1.40. Producer

Producer, also known as manufacturer or enterprise, refers to a single economic unit that can make unified production decisions.

1.4 1. production function

The production function represents the relationship between the quantity of various production factors used in production and the maximum output that can be produced in a certain period of time under the condition of constant technical level.

1.42. Factors of production

Factors of production are generally divided into four categories: land, capital, labor force and entrepreneurial ability.

1.43. Fixed input proportion production function

Fixed input ratio production function is also called Leontief production function. He said that at every output level, the ratio between any pair of inputs of production factors is fixed.

1.44. Cobb-Douglas production function

The general form is: Q = A Lα Kβ, where the economic meanings of parameters α and β are: when α+β= 1, α and β respectively represent the relative importance of labor and capital in the production process, α is the share of labor income in the total output, and β is the share of capital in the total output.

1.45. Short-term and long-term production

Short-term means that producers have no time to adjust the quantity of all factors of production, and at least one factor of production is a fixed time period. Long-term refers to the time period during which producers can adjust the quantity of all production factors.

1.46. Total output

Total output refers to the maximum output corresponding to a variable factor input.

1.47. Average output

The average output refers to the output produced by the average input per unit of variable elements.

1.48. Marginal products

Marginal product refers to the output increased by increasing the input of unit variable factors.

1.49. Law of diminishing marginal returns

There is a common phenomenon in production: under the condition of constant technical level, in the process of continuously adding a variable factor of production to one or more other factors of production with constant quantity, when the input of this variable factor is less than a certain value, the marginal products brought by increasing the input of this factor are increasing; When the input of this variable element increases and exceeds this specific value, the marginal product brought by increasing the input of this variable element is decreasing. This is the law of diminishing marginal returns.

1.50. Equal income curve

Equal output curve is the trajectory of all different combinations of inputs of two production factors that produce the same output under the condition of constant technical level.

1.5 1.

In the process of mutual substitution of two factors of production, there is a common phenomenon: under the premise of keeping the output unchanged, when the input of one factor of production is increasing, the number of another factor of production that can be replaced by each unit of factor of production is decreasing. This phenomenon is called marginal rate of technical substitution's law of decline.

1.52. Equal cost line

Equal cost line is the trajectory of different quantity combinations of two production factors that producers can buy under the condition of given cost and price of production factors.

1.53. Isodiagonal

Equal oblique line is the locus of points with equal marginal rates of technological substitution of two elements in a set of equal output curves.

1.54. Extension line

If the price of production factors and production technology remain unchanged, if the enterprise changes the cost, the equal cost line will shift; If the enterprise changes the output, the equal output curve will move. These different equal output curves will be tangent to different equal cost lines, forming a series of different production equilibrium points, and the trajectory of these production equilibrium points is the expansion line.

1.55. Return to scale

The return to scale analysis involves the relationship between the change of production scale and the change of output caused by enterprises. See P 147 in this book for details.

1.56. Opportunity cost

Generally speaking, the opportunity cost of producing unit goods refers to the highest income that producers can get by using the same production factors for other production purposes.

1.57. Huge cost

The obvious cost of enterprise production refers to the actual expenditure of production factors that manufacturers need to buy or rent in the factor market.

1.58. Hidden cost

The hidden cost of enterprise production refers to the total price of those production factors owned by the manufacturer itself and used in the production process of the enterprise.

1.59. Economic profit and normal profit

The sum of all explicit and implicit costs of an enterprise constitutes the total cost. The economic profit of an enterprise refers to the difference between its total income and total cost. Normal profit refers to the remuneration paid by manufacturers for their entrepreneurial talents.

1.60. Short-term cost

In the short term, the manufacturer's cost can be divided into two parts: fixed cost part and variable cost part. Specifically, there are seven short-term costs of manufacturers: total non-cost, total variable cost, total cost, average non-cost, average variable cost, average cost and marginal cost.

1.6 1. Long-term cost

In the long run, all the costs of manufacturers are variable. The long-term cost of manufacturers can be divided into long-term total cost, long-term average cost and long-term marginal cost.

1.62. Economies of scale and diseconomies of scale

In the initial stage of enterprise production expansion, manufacturers improve economic benefits by expanding production scale, which is called economies of scale. When production expands to a certain scale, manufacturers will continue to expand production scale, which will reduce economic benefits. This is called diseconomy of scale. In other words, the multiple of the manufacturer's output increase is greater than the multiple of the cost increase, which is economies of scale. On the contrary, the multiple of the manufacturer's output increase is less than the multiple of the cost increase, and the scale is uneconomical. Obviously, economies of scale and diseconomy of scale are caused by manufacturers changing their production scale, so they are also called internal economies and internal diseconomy.

1.63. External economy and external diseconomy

External economy and external diseconomy are caused by factors other than enterprises, which affect the position of the long-term average cost curve of manufacturers.

1.64. Market and industry

Market is an organizational form or institutional arrangement in which buyers and sellers interact to determine the price and quantity of transactions. Industry refers to the sum of all manufacturers that produce and supply goods for the same commodity market.

1.65. Completely competitive market

A perfectly competitive market must meet the following four conditions: first, there are a large number of buyers and sellers in the market. Second, the goods provided by every manufacturer in the market are homogeneous. Third, all resources are completely mobile. Fourth, the information is complete.

1.66. Demand curve faced by manufacturers in a perfectly competitive market

The demand curve of perfectly competitive manufacturers is a horizontal line starting from the established market price level.

1.67. Total income

Total revenue refers to the total revenue obtained by manufacturers selling a certain number of products at a certain price.

1.68. Average income

Average income refers to the income earned by manufacturers in average sales per unit of products.

1.69. Marginal income

Marginal income refers to the increment of total income obtained by manufacturers by increasing the sales of one unit of products.

1.70. Equilibrium conditions for profit maximization

Marginal income equals marginal cost, which is the equilibrium condition of maximizing the profit of manufacturers.

1.7 1. breakeven point

The equilibrium point at which a manufacturer can achieve normal profits without economic profits is also called the break-even point.

1.72. Stop the working point

The average profit of the manufacturer is equal to the average variable cost, and the manufacturer can continue to produce or not, that is, the result of the manufacturer's production or not is the same. Because at this equilibrium point, the manufacturer is out of the critical point of closing the enterprise, so the equilibrium point is also called the stopping point or closing point.

1.73. Industries with constant costs

An industry with constant cost is an industry in which the demand change of production factors caused by output change does not affect the price of production factors.

1.74. Industries with increasing costs

The industry with increasing cost is such an industry, and the change of demand for production factors caused by the change of output in this industry will lead to the increase of production factor prices.

1.75. Industries with reduced costs

The industry with decreasing cost is such an industry. The change of demand for production factors caused by the change of output in this industry actually reduces the price of production factors.

1.76. Producer surplus

Producer surplus refers to the difference between the total payment actually accepted and the minimum total payment that the manufacturer is willing to accept when providing a certain quantity of a certain product.

1.77. Consumer rules

Consumer-led refers to the decisive role of consumers in commodity production, which is the most basic economic problem in economic society. This function is as follows: consumers use money to buy goods and vote for goods. Western scholars believe that this consumer-led economic relationship can promote the rational utilization of social and economic resources, so that consumers in the whole society can get the greatest satisfaction.

1.78. Imperfectly competitive market

In western economics, an imperfect competitive market is relative to a perfectly competitive market. Except for a perfectly competitive market, all markets with certain monopoly factors are called imperfect competitive markets. Imperfect competitive market can be divided into three types, namely monopoly market, oligopoly market and monopoly competitive market. Among them, the monopoly market has the highest degree of monopoly. The oligopoly market is in the middle and the monopolistic competition market is the lowest.

1.79. Monopoly the market

Monopoly market refers to a market organization with only one manufacturer in the whole industry. Specifically, there are three main conditions for monopolizing the market: first, only one manufacturer produces and sells goods in the market; Second, there is no similar substitute for the goods produced and sold by this manufacturer; Third, it is extremely difficult or impossible for any other manufacturer to enter this industry.

1.80. Natural monopoly

The production of some industries has such characteristics: the economies of scale of enterprise production need to be fully reflected in a large output range and the corresponding production and operation level of huge capital equipment, so that the output of the whole industry can only be achieved by one enterprise. And as long as we give full play to the production capacity of this enterprise on this production scale, we can meet the demand of the whole market for this product. In the production of such products, there will always be a manufacturer in the industry who will take the lead in reaching this production scale with strong economic strength and other advantages, thus monopolizing the production and sales of the whole industry. This is natural monopoly.

1.8 1. Demand curve and income curve of monopoly manufacturers

Because there is only one manufacturer in the monopoly market, the demand curve of the market is the demand curve faced by the monopoly manufacturer. The AR curve and demand curve D of monopoly manufacturers overlap, and both of them are inclined to the lower right.

1.82. Price discrimination

Selling the same product at different prices is called price discrimination. If the manufacturer sells each unit of product at the highest price that consumers are willing to pay, this is first-class price discrimination. First-class price discrimination is also called complete price discrimination. Second degree price discrimination requires different prices for different consumption segments. Monopoly manufacturers charge different prices for the same product in different markets (or for different consumer groups), which is three-level price discrimination.

1.83. Monopoly the competitive market

A monopolistic competitive market is a market organization in which many manufacturers produce and sell different products of the same kind. The sum of a large number of manufacturers producing very close products in the market is called market group.

1.84. Non-price competition

In the monopoly market, because the products produced by each manufacturer are different, in the monopoly market, the market share of their products is often expanded by improving product quality, carefully designing packaging, improving after-sales service and advertising, which is non-price competition.

1.85. Production Team

The sum of a large number of manufacturers who produce very close products in a monopolistic competitive market is called market group.

1.86. demand curve of monopoly competitors

The demand curve of monopoly competitors inclined to the lower right is relatively flat, which is close to the horizontal demand curve of complete competitors. D demand curve shows the relationship between the product price and sales volume of a manufacturer in a monopoly competitive production group under the condition that the product prices of other manufacturers remain unchanged. D demand curve shows the relationship between the product price and sales volume of a manufacturer in a monopoly competitive production group when all other manufacturers in the production group change the product price in the same way.

1.87. Ideal output and redundant production capacity

Generally speaking, the output of a perfectly competitive enterprise at the lowest point of the long-term average cost curve is called ideal output, and the difference between actual output and ideal output is called redundant production capacity.

1.88. Oligopoly market

Oligopoly market is also called oligopoly market. Refers to a market organization in which a few manufacturers control the production and sales of products in the whole market.

1.89. Pure oligopoly industries and different oligopoly industries

According to product characteristics, oligopoly industries can be divided into pure oligopoly industries and different oligopoly industries. In a pure oligopoly industry, there is no difference between the products produced by manufacturers. In different oligopoly industries, manufacturers produce different products.

1.90. Optimal strategy

No matter what strategies other participants adopt, a player's only optimal strategy is his dominant strategy.

1.9 1.

The equilibrium formed by the combination of dominant strategies of all participants in the game is the dominant strategy equilibrium.

1.92. Nash equilibrium

In Nash equilibrium, if other participants don't change their optimal strategy, no one will change his optimal strategy.

1.93. The plight of prisoners

A little. See P244 in this book.

1.94. Infinitely repeated game

The so-called infinitely repeated game means that games with the same structure can be infinitely repeated.

1.95. Time-limited repeated game

Time-limited repetitive game refers to the limited repetition of games with the same structure.

1.96. Marginal products

Increase production by using one unit of elements.

1.97. Marginal product value

It means that under the condition of perfect competition, manufacturers use the elements of one unit to increase their income. VMP = P * MP

1.98. Marginal income products

It represents the marginal revenue of the general use of factors by manufacturers. MRP = MR * MP

1.99. Marginal factor cost

Marginal factor cost is the cost of increasing the use of a unit factor. MFC =[L * W(L)]' = W(L)+L *[dW(L)/dL]

1. 100. Local Equilibrium and General Equilibrium

Local equilibrium studies a single (product or factor) market. General equilibrium studies all interrelated markets as a whole. Partial equilibrium is an analysis of the supply-demand relationship and price equilibrium of a single market or part of the market. General equilibrium is to analyze the supply-demand relationship and price equilibrium of all markets in an economic society.

1. 10 1. Walras's law

When some assumptions are satisfied, the general equilibrium system has an equilibrium solution.

1. 102. Excess demand function and fixed point theorem

Walras proved that the existence of general equilibrium was wrong by calculating the number of equations and unknowns.

In the 1920s and 1930s, western economists used mathematical methods such as set theory and topology to prove that general equilibrium systems can only be solved under extremely strict assumptions. The basic idea of proof is:

Let the whole economy contain n kinds of goods (elements and products). Starting from the family's utility maximization behavior, we can get the demand of each product and the supply of each factor; From the profit maximization behavior of manufacturers, we can get the supply of each product and the demand of production factors. The excess demand of each commodity can be obtained by subtracting the corresponding supply from the demand of each product and factor. These excess demands are the functions of the price system, that is, the price vector. Since all prices change proportionally at the same time, the value of excess demand will not change, so the original price vector set can be "compressed" into a standard price vector set through transformation. The excess demand function determines the mapping from the standardized price vector set to the excess demand price vector set; If we "construct" a mapping from the excess demand vector set to the standardized vector set and "compound" the two mappings, we will get a mapping from the standardized price vector set to itself. According to brower's fixed point theorem, a set of standardized price vectors has a fixed point under certain conditions. And this fixed point is the general equilibrium price vector.

1. 103. positive economics and normative economics

Positive economics studied how the economic system works, made relevant assumptions about economic behavior, analyzed and stated economic behavior and its consequences according to the assumptions, and tried to test the conclusion. Normative economics tries to evaluate the operation of an economic system from a certain social value judgment standard, further explains how an economic system should operate, and puts forward corresponding economic policies for this purpose.

1. 104. Welfare Economics

Welfare economics belongs to the category of normative economics. On the premise of certain value judgment, this paper puts forward the standard of economic behavior and discusses how to make economic activities meet this standard. Specifically, it studies the necessary conditions for a country to maximize social and economic welfare and the policies and measures that the country should adopt to improve social welfare from two aspects: the effective allocation of production resources and the distribution of national income among social members.

1. 105. Pareto optimal state

If for a given resource allocation state, all Pareto improvements do not exist, that is, in this state, it is impossible to make at least one person's situation better without making anyone's situation worse, then this resource allocation state is called Pareto optimal state.

1. 106. Pareto optimal conditions

The conditions that must be met to reach the Pareto optimal state are called Pareto optimal conditions. It includes exchange, production and the optimal conditions of exchange and production.

1. 107. Contract curve

Contract curve is divided into exchange contract curve (or efficiency curve) and production contract curve (or efficiency curve). The exchange contract curve represents the set of all optimal allocation of two products between two consumers. The production contract curve represents the set of all optimal distribution states of two factors between two producers.

1. 108. Production possibility curve

The production possibility curve is the geometric representation of the optimal production set.

1. 109. Social welfare function

We need to know the relative size of social welfare represented by each point on the utility possibility curve, or more generally, we need to know the relative size of social welfare represented by each point in the utility possibility area or the whole utility space: this is the so-called social welfare function. (textbook)

Social welfare function is the relationship between social welfare level and the utility level of all social members. It shows a society's preference for the dual goals of efficiency and fairness, and consists of a social indifference curve. The unified feature of the social indifference curve is that it must be symmetrical about the 45-degree ray starting from the origin. Different ethical concepts form different social welfare functions and indifference curves. (Shanghai University of Finance and Economics Financial Speech)

1. 1 10. Social indifference curve

Social indifference curve. Every social indifference curve represents a certain level of social utility, and the slope of each point on the curve represents the marginal substitution rate of private goods and public goods by society. Each point on each curve represents various combinations of private goods and public goods with equal welfare level. The indifference curve with higher position represents higher welfare level. (National People's Congress).

1.111.Impossible theorem

In the case of non-dictatorship, it is impossible to have a social welfare function suitable for all personal preference types.

1. 1 12. Market socialism

Market socialism is a theory that tries to combine public ownership of means of production with market economy to realize socialism. It appeared in the 1930s and was written by the Polish economist Oscar? Langer systematically expounded for the first time. Among the various models of market socialism put forward by western left-wing scholars, the most influential one is British scholar David. Miller's "cooperative market socialism", American scholar John? Romer's Market Socialism of Securities and American scholar David? Schweickart's "Market Socialism with Economic Democracy". (People's Network)

1. 1 13. Market failure

In the real capitalist economy, the invisible hand principle generally does not hold, and the Pareto optimal state cannot be realized. In other words, the realistic capitalist market mechanism cannot lead to the effective allocation of resources on many occasions. This situation is called so-called market failure.

1. 1 14. antitrust law

From 1890 to 1950, the US Congress passed a series of anti-monopoly bills. These include: Sherman Act (1890), Clayton Act (19 14), Federal Trade Commission Act (19 14), Robinson-patman Act (1936).

1. 1 15. Public control

Monopoly often leads to inefficient resource allocation. In addition, monopoly profits are usually considered unfair. This makes it necessary for the government to intervene in monopoly. Government intervention in monopoly is varied. Collectively referred to as public control.

1. 1 16. External influence

The influence of the economic behavior of a single consumer or producer on the welfare of others in society.

1. 1 17. Coase theorem

As long as the property right is clear and the transaction cost is zero or small, the final result of market equilibrium is efficient no matter who the property right is given to at the beginning.

1. 1 18. Public goods

Articles that are neither exclusive nor competitive are called public goods. Articles that are not exclusive but competitive are called public resources.

1 19. Externality: Also known as external economic influence, it means that an economic unit engaged in an economic behavior cannot get all the benefits or pay all the costs from its behavior.