efficiency and equity 5 chapter 效率與公平. objectives after studying this chapter, you will...

EFFICIENCY AND EQUITY 5CHAPTER

效率與公平

Objectives

After studying this chapter, you will able to Define efficiency

Distinguish between value and price and define consumer surplus

Distinguish between cost and price and define producer surplus

Explain the conditions under which markets move resources to their highest-valued uses and the sources of inefficiency in our economy

Explain the main ideas about fairness and evaluate claims that markets result in unfair outcomes

Self-Interest and the Social Interest

When you buy a pair of shoes or a textbook or fill your gas tank, or even just take a shower, you express your view about how scarce resources should be used.

You make choices that are in your self-interest.

Markets coordinate your choices with those of everyone else.

Do markets do a good job?

Do they enable our self-interest choices to be in the social interest?

And do markets produce a fair outcome?

自利與社會利益

Efficiency and the Social Interest

Allocative efficiency is one aspect of the social interest and the aspect about which economists have most to say.

An efficient allocation of resources occurs when we produce the goods and services that people value most highly. 將資源用於生產人們評價最高的財貨與勞務

Resources are allocated efficiently when it is not possible to produce more of a good or service without giving up some other good or service that is valued more highly.

Efficiency is based on value, and people’s preferences determine value.

效率與社會利益

Efficiency: A Refresher

Marginal Benefit

Marginal benefit is the benefit a person receives from consuming one more unit of a good or service.

We can measure the marginal benefit from a good or service by the dollar value of other goods and services that a person is willing to give up to get one more unit of it.

The concept of decreasing marginal benefit implies that as more of a good or service is consumed, its marginal benefit decreases.

效率


Figure 5.1 shows the decreasing marginal benefit from each additional slice of pizza, measured in dollars per slice.

效率


Marginal Cost

Marginal cost is the opportunity cost of producing one more unit of a good or service. The measure of marginal cost is the value of the best alternative forgone to obtain the last unit of the good.

We can measure the marginal cost of a good or service by the dollar value of other goods and services that a person is must give up to get one more unit of it.

The concept of increasing marginal cost implies that as more of a good or service is produced, its marginal cost increases.

效率


Figure 5.1 shows the increasing marginal cost of each additional slice of pizza, measured in dollars per slice.

效率


Efficiency and Inefficiency

If the marginal benefit from a good exceeds its marginal cost, producing and consuming more of the good uses resources more efficiently.

效率


If the marginal cost of a good exceeds its marginal benefit, producing and consuming less of the good uses resources more efficiently.

效率


If the marginal cost of a good equals its marginal benefit, resources are being use efficiently.

效率

Value, Price, and Consumer Surplus

Value, Willingness to Pay, and Demand

The value of one more unit of a good or service is its marginal benefit, which we can measure as maximum price that a person is willing to pay.

A demand curve for a good or service shows the quantity demanded at each price.

A demand curve also shows the maximum price that consumers are willing to pay at each quantity.

價值 , 價格與消費者剩餘


Figure 5.2 shows these two ways of interpreting a demand curve.

In part a, shown here, the demand curve tells us the quantity that consumers plan to buy at a given price.



In part b, shown here, the demand curve tells us the maximum price that consumers are willing to pay for a given quantity.

This price measures the marginal benefit of the good at that given quantity.



Consumer Surplus

Consumer surplus is the value of a good minus the price paid for it, summed over the quantity bought.

It is measured by the area under the demand curve and above the price paid, up to the quantity bought.

Figure 5.3 on the next slide shows the consumer surplus for pizza for an individual consumer.



The price paid is the market price, which is the same for each unit bought.

The quantity bought is determined by the demand curve and the blue rectangle shows the amount paid for pizza.

The green triangle shows the consumer surplus from pizza.



The consumer surplus on the 10th slice is the $2 that the consumer is willing to pay minus the $1.50 that she does pay, which is 50 cents a slice.


Cost, Price, and Producer Surplus

Cost, Minimum Supply-Price, and Supply

The cost of one more unit of a good or service is its marginal cost, which we can measure as minimum price that a firm is willing to accept.

A supply curve of a good or service shows the quantity supplied at each price. A supply curve also shows the minimum price that producers are willing to accept at each quantity.

成本 , 價格與生產者剩餘


Figure 5.4 shows these two ways of interpreting a supply curve.

In part a, shown here, the supply curve tells us the quantity that producers plan to sell at a given price.



In part b, shown here, the supply curve tells us the minimum price that producers are willing to accept for a given quantity.

This price measures the marginal cost of producing that given quantity of the good.



Producer Surplus

Producer surplus is the price of a good minus the marginal cost of producing it, summed over the quantity sold.

Producer surplus is measured by the area below the price and above the supply curve, up to the quantity sold.

Figure 5.5 on the next slide shows the producer surplus for pizza for an individual producer.


生產者剩餘


The price is the market price, which is the same for each unit sold.

The quantity sold is determined by the supply curve and the red area shows the total cost of producing pizza.

The blue triangle shows the producer surplus from pizza.



The producer surplus on the 50th pizza is the $15 that the producer receives minus the $10 that it cost to produce, which is $5 a pizza.


Is the Competitive Market Efficient?

Efficiency of Competitive Equilibrium競爭市場均衡下的效率Figure 5.6 shows that a competitive market creates an efficient allocation of resources at equilibrium.

In equilibrium, the quantity demanded equals the quantity supplied.

競爭市場有效率嗎？

** 競爭市場均衡達到效率配置 **


At the equilibrium quantity, marginal benefit equals marginal cost, so the quantity is the efficient quantity.

The sum of consumer and producer surplus is maximized at this efficient level of output.



競爭市場均衡下的效率競爭市場均衡下的效率•資源將最有效率的被配置運用於生產價值最高的財貨之上

•生產者剩餘與消費者剩餘之和達到最大

•資源將最有效率的被配置運用於生產價值最高的財貨之上

•生產者剩餘與消費者剩餘之和達到最大



The Invisible Hand 一隻看不見的手 Adam Smith’s “invisible hand” idea in the Wealth of Nations implied that competitive markets send resources to their highest valued use in society.

Consumers and producers pursue their own self-interest and interact in markets.

Market transactions generate an efficient—highest valued—use of resources.


「競爭市場下，每個參與者將被一隻看不見的手，引導到資源最有效率被使用的境界，而此狀況並非任何參與者最原始的企圖」


The Invisible Hand at Work Today

The invisible works in our economy today.

The cartoon on page 109 shows how the invisible hand sometimes works in surprising ways.

It coordinates the self interest of producers and consumers of computers, oranges, and just about every good or service that you can think of.


今日看不見的手的運作


Obstacles to Efficiency

Markets are not always efficient and the obstacles to efficiency are:

Price ceilings and floors 價格上限和價格下限 Taxes, subsidies, and quotas. 課稅、補貼和配額 (Ch.6)

Monopoly 獨占 (Ch.11)

External costs and external benefits外部成本與外部利益 Public goods and common resources 公共財 -free rider

problem

效率的阻礙


Underproduction and Overproduction

Obstacles to efficiency lead to underproduction or overproduction and create a deadweight loss (社會死沉損失 ,或稱社會淨損失 )—a decrease in consumer and producer surplus.


Figure 5.7a shows the effects of underproduction.

If production is restricted to 5,000 pizzas a day, a dead weight loss arises from underproduction.

The efficient quantity is 10,000 pizzas a day.


Figure 5.7b shows the effects of overproduction.

If production is expanded to 15,000 pizzas a day, a dead weight loss arises from overproduction.

Again, the efficient quantity is 10,000 pizzas a day.

Is the Competitive Market Fair?

Ideas about fairness can be divided into two groups:

It’s not fair if the result isn’t fair 若結果不公平則不公平 It’s not fair if the rules aren’t fair 若規則不公平則不公平

競爭市場是公平的嗎？


It’s Not Fair if the Result Isn’t FairThe idea that “it’s not fair if the result isn’t fair” began with utilitarianism( 效用主義論 ), which is the principle that states that we should strive to achieve “the greatest happiness for the greatest number.” 認為我們應努力追求大多數人的快樂 ( 滿足 )

If everyone gets the same marginal utility from a given amount of income, and if the marginal benefit of income decreases as income increases, taking a dollar from a richer person and given it to a poorer person increases the total benefit. Only when income is equally distributed has the greatest happiness been achieved.



Figure 5.8 shows how redistribution increases efficiency.

Tom is poor and has a high marginal benefit of income.

Jerry is rich and has a low marginal benefit of income.

Taking dollars from Jerry and giving them to Tom until they have equal incomes increases total benefit.



Utilitarianism ignores the cost of making income transfers.

Recognizing these costs leads to the big tradeoff between efficiency and fairness.

課徵所得稅使人們工作意願降低 , 使勞動雇用量較效率水準時的僱用量少 . 對資本課徵所得稅使人們儲蓄意願減少 ,此將使資本存量較效率水準時低 . 使經濟大餅縮水 .

Because of the big tradeoff, John Rawls proposed that income should be redistributed to point at which the poorest person is as well off as possible.

修正效用主義 , 提出公平分配的原則 , 是盡可能使窮人過得好一點 . 故高所得者應被課稅 , 但稅率不該太高 , 避免使經濟大餅縮水 . 稅率太高 , 使經濟大餅縮水 , 對窮人未必好 .



It’s Not Fair If the Rules Aren’t Fair

The idea that “it’s not fair if the rules aren’t fair” is based on the symmetry principle, which is the requirement that people in similar situations be treated similarly.



In economics, this principle means equality of opportunity, not equality of income. Robert Nozick suggested that fairness is based on two rules:

The state must create and enforce laws that establish and protect private property.

Private property may be transferred from one person to another only by voluntary exchange.


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efficiency and equity 5 chapter 效率與公平. objectives after studying this chapter, you will...

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