Vous êtes sur la page 1sur 4

ECON2101/2210BE Micro Theory Tutorial Week 3

Grace, YU Yatu Email: graceyt@hku.hk Office: KK1026 Tel: 2857 8310 Something about the tutorial: Tutorials have to take attendance. If you change tutorial session temporarily, please sign up the tutorial session you registered originally. I will prepare tutorial notes for you. After the tutorial, you can download the notes on Moodle.
Budget Constraints on Taxes, Subsidies and Rationing (V. Ch2.6) Quantity Tax a tax on each unit of the good. Value Tax (ad valorem tax) a tax on the price of the good.

Quantity Subsidy an amount to the consumer that depends on the amount of the good purchased. Ad Valorem Subsidy a subsidy based on the price of the good being subsidized.

Page 1 of 4

ECON2101/2210BE Micro Theory Tutorial Week 3

Rationing the level of consumption of some good is fixed to be no larger than some amount.

QUESTION: Consider a situation where a consumer could consume good 1 at a price of P1 up to some level , and then had to pay a tax t per unit on all consumption in excess of How to draw the budget line? .

The Food Stamp Program a. A family is allowed to buy $153 of food stamps for $25. (Assume we are measuring each good in terms of the money spent on it, the price of each good is automatically 1.) A family is simply given $200 food stamps.

b.

Page 2 of 4

ECON2101/2210BE Micro Theory Tutorial Week 3

Review on Derivatives The derivative of a function

y f ( x) is defined as

df ( x) f ( x x) f ( x) f ' ( x) lim dx x x0
1. 2. 3. 4. 5. 6. Rules of differentiation

f ( x) k f ( x) kxn
f ( x) ln x

f ' ( x ) 0 f ' ( x) knxn1


f ' ( x)
1 x

F ( x) h( x) g ( x) F ( x) h( x) g ( x)
F ( x) h[ g ( x)]

' ( x ' ( x) F ' ( x) h ) g

F ' ( x) h( x) 'g ( x) ' h ( x) g ((Product x) rule)


F ' ( x) dh dg ( x) (Chain rule) dg ( x) dx

Applications: Slope of a function; maximization

Review on Partial Derivatives The partial derivative of

f ( x1, x2 )

with respect to

x1 is defined by

f ( x1, x2 ) f ( x1 x1, x2 ) f ( x1, x2 ) lim x1 x1 x10


The partial derivative of

f ( x1, x2 )

with respect to

x2 is defined by
2

f ( x1, x 2) f ( x ,1x f ( x , x1 ) 2 x ) 2 lim x2 x2 x2 0

Rules of differentiation: Similar as derivatives. But when take the partial derivative of

f ( x1, x2 )

with respect to

x1 , hold x2 constant and vice versa.

Application: Marginal utility Marginal utility (MU) measures the additional satisfaction obtained from consuming one additional unit of a good.
Page 3 of 4

ECON2101/2210BE Micro Theory Tutorial Week 3

Marginal rate of substitution (MRS) is the rate at which a consumer is ready to give up one good in exchange for another good while maintaining the same level of utility.

EXERCISES: Calculate marginal utilities and marginal rates of substitution for some common utility functions. MU1(x1, x2) ax1 + bx2 a MU2(x1, x2) b 1 ln x1 + x2 v(x1) + x2 x1x2 x1ax2b (x1 + a)(x2+ b) x1a + x2a 1/x1 v(x1) x2 a x1a-1x2b (x2 + b) a x1a-1 1 1 x1 b x1ax2b-1 (x1 + a) a x2a-1 MRS(x1, x2) -a/b

-1/x1 - v(x1) -x2/x1

- (x2 + b)/ (x1 + a)

Page 4 of 4

Vous aimerez peut-être aussi