北京大学：《中级微观经济学》课程教学资源（PPT课件讲稿，英文版）Chapter Thirty 交换 Exchange

Chapter Thirty Exchange 交换

Chapter Thirty Exchange 交换

Contents The Edgeworth(艾奇沃斯)Box Pareto improving trade Pareto Efficient Allocation The core(核心) Trade in a competitive market Wa| ras'Law of genera| equilibrium(一般均 衡) First fundamental theorem of welfare Economics(福利经济学第一定理) Second Fundamental Theorem of welfare Economics(福利经济学第二定理)

Contents The Edgeworth (艾奇沃斯) Box Pareto improving trade Pareto Efficient Allocation The Core (核心) Trade in a competitive market Walras’ Law of general equilibrium (一般均 衡) First Fundamental Theorem of Welfare Economics (福利经济学第一定理) Second Fundamental Theorem of Welfare Economics (福利经济学第二定理)

E Xchange Two consumers, a and B Their endowments of goods 1 and 2 are A RA=(AA andB(BB E.g A (6, 4)and a B (2,2 The total quantities available are @ toB 6+2=8 units of good 1 and ai +a%=4+2=6 units of good 2

Exchange Two consumers, A and B. Their endowments of goods 1 and 2 are E.g. The total quantities available    A A A = ( , ) 1 2    B B B = ( , ). and 1 2  A = (6,4)  B and = (2,2). 1 1 6 2 8 A B + = + =  2  2 4 2 6 A B + = + = units of good 1 and units of good 2. are

Exchange Edgeworth and bowley devised a diagram, called an Edgeworth box, to show all possible allocations of the available quantities of goods 1 and 2 between the two consumers

Exchange Edgeworth and Bowley devised a diagram, called an Edgeworth box, to show all possible allocations of the available quantities of goods 1 and 2 between the two consumers

Starting an Edgeworth box

Starting an Edgeworth Box

Starting an Edgeworth box Width A+@1 =6+2=8

Starting an Edgeworth Box Width = 1 1 6 2 8 A B + = + =

Starting an Edgeworth box Height 02+m2 4+2 6 Width A+@1 =6+2=8

Starting an Edgeworth Box Width = 1 1 6 2 8 A B + = + = Height =  2  2 4 2 6 A B + = + =

Starting an Edgeworth box Height The dimensions of 02+m2 the box are the 4+2 quantities available 6 of the goods Width A+@1 =6+2=8

Starting an Edgeworth Box Width = 1 1 6 2 8 A B + = + = Height =  2  2 4 2 6 A B + = + = The dimensions of the box are the quantities available of the goods

Feasible allocations What allocations of the 8 units of good 1 and the 6 units of good 2 are feasible? How can all of the feasible allocations be depicted by the Edgeworth box diagram? One feasible allocation is the before trade allocation: ie, the endowment allocation

Feasible Allocations What allocations of the 8 units of good 1 and the 6 units of good 2 are feasible? How can all of the feasible allocations be depicted by the Edgeworth box diagram? One feasible allocation is the before￾trade allocation; i.e. the endowment allocation

The Endowment allocation Height= The endowment allocation is 0)+ a=(6,4) 4+2 and 6 B=(2 2) Width=1+=6+2=8

Width = 1 1 6 2 8 A B + = + = Height =  2  2 4 2 6 A B + = + = The endowment allocation is  A = (6,4)  B = (2,2). and The Endowment Allocation