Priciples of Microeconomics (2)
Today we're going to start talking about what's underneath the demand curve.
So basically, what we did last time, and what you did in section on Friday is talk about sort of the workhorse model of economics, which is supply and demand model.
And we always start the class with that, because that's the model in the course. But I think as any good sort of scientists and inquisitive minds, you're probably immediately asking, well,
Where do these supply and demand curves come from?
They don't just come out of thin air.
How do we think about them?
Where do they come from?
And that's what we'll spend basically the first 1/2 of the course going through. And so we're going to start today with the demand curve, and the demand curve is going to come from how consumers make choices, OK? And that will help us drive the demand curve.
Hari ini kita akan mulai berbicara tentang apa yang ada mendasari kurva permintaan.
Pada dasarnya, apa yang kami lakukan terakhir kali, dan apa yang kalian pelajari pada hari Jumat (lalu) adalah berbicara tentang model ekonomi secara garis besar, yaitu model penawaran dan permintaan.
Dan kami selalu memulai kuliah dengan (model penawaran dan permintaan). Karena itulah yang tercamtum dalam standar perkuliahan. Tapi kupikir sebagai ilmuwan, dan pikiran yang ingin tahu yang baik, kau mungkin segera bertanya,
yah, dari mana kurva penawaran dan permintaan ini berasal?
Mereka tidak hanya keluar dari udara tipis.
Bagaimana kita berpikir tentang mereka?
Dari mana mereka berasal?
Dan itulah yang akan kita habiskan pada dasarnya 1/2 pertama dari kuliah yang dilalui. Jadi kita akan mulai hari ini dengan kurva permintaan, dan kurva permintaan akan datang dari bagaimana konsumen membuat pilihan, oke? Dan itu akan membantu kita mengenali kurva permintaan.
Then we'll turn next to supply curve, which will come from how firms make production decisions. But let's start with the demand curve, and we're going to start by talking about people's preferences, and then the utility functions, OK?
So our model of consumer decision making is going to be a model of utility maximization. That's going to be our fundamental-- remember, this course is all about constrain maximization. Our model today is going to be a model of utility maximization. And this model's going to have two components. There's going to be consumer preferences, which is what people want, and there's going to be a budget constraint, which is what they can afford. And we're going to put these two things together.
We're going to maximize people's happiness, or their choice-- or their happiness given their preferences, subject to the budget constraint they face. And that's going to be the constraint maximization exercise that actually, through the magic of economics, is going to yield the demand curve, and yield a very sensible demand curve that you'll understand intuitively. Now, so what we're going to do is do this in three steps.
- Step one-- over the next two lectures. Step one is we'll talk about preferences, how do we model people's tastes. We'll do that today.
- Step two is we'll talk about how we translate this to utility function, how we mathematically represent people's preferences in utility function.
We'll do that today as well.
Kemudian kita akan beralih ke kurva pasokan, yang akan datang dari bagaimana perusahaan membuat keputusan produksi. Tapi mari kita mulai dengan kurva permintaan, dan kita akan mulai berbicara tentang preferensi orang, dan kemudian fungsi utilitas, oke?
Jadi model pengambilan keputusan konsumen kami akan menjadi model maksimalisasi utilitas. Itu akan menjadi fundamental-- kami ingat, kursus ini adalah tentang maksimalisasi batasan. Model kita hari ini akan menjadi model maksimalisasi utilitas. Dan model ini akan memiliki dua komponen.
- Akan ada preferensi konsumen, yang diinginkan orang,
- dan akan ada kendala anggaran, yang mampu mereka beli.
Dan kita akan menyatukan dua hal ini.
Kami akan memaksimalkan kebahagiaan orang, atau pilihan mereka-- atau kebahagiaan mereka, mengingat preferensi mereka, tergantung pada kendala anggaran yang mereka hadapi. Dan itu akan menjadi latihan maksimalisasi kendala yang sebenarnya, melalui keajaiban ekonomi, akan menghasilkan kurva permintaan, dan menghasilkan kurva permintaan yang sangat masuk akal yang akan kau pahami secara intuitif.
Sekarang, jadi apa yang akan kita lakukan adalah melakukan ini dalam tiga langkah. Langkah satu-- selama dua kuliah berikutnya.
- Langkah pertama adalah kita akan berbicara tentang preferensi, bagaimana kita mencontoh selera orang. Kami akan melakukannya hari ini.
- Langkah kedua adalah kita akan berbicara tentang bagaimana kita menerjemahkan ini ke fungsi utilitas, bagaimana kita secara matematis mewakili preferensi orang dalam fungsi utilitas.
Kami akan melakukannya hari ini juga.
And then next time, we'll talk about the budget constraints that people face. So today, we're going to talk about the max demand. Next time we'll talk about the budget constraint. That means today's lecture is quite fun. Today's lecture is about unconstrained choice.
We're not going to worry at all about what you can afford, what anything costs. We're not going to worry about what things cost. We're not going to worry about what you can afford, OK? Today's the lecture where you won the lottery, OK? You won the lottery. Money is no object. How do you think about what you want, OK? Next time, we'll say, well, you didn't win the lottery. In fact, as we learn later in the semester, no one wins the lottery. It's an incredibly bad deal. But next time, we'll impose the budget constraints. But for today, we're just going to ignore that and talk about what do you want, OK? And to start this, we're going to start with a series of preference assumptions. A series-- remember, as I talked about last time, models rely on simplifying assumptions. Otherwise, we could never write down a model. It'll go on forever, OK?
Dan kemudian, lain kali kita akan berbicara tentang kendala anggaran yang dihadapi orang-orang. Jadi hari ini, kita akan berbicara tentang permintaan maksimal. Lain kali kita akan berbicara tentang kendala anggaran. Itu berarti kuliah hari ini cukup menyenangkan. Kuliah hari ini adalah tentang pilihan yang tidak dibatasi.
Kami tidak akan khawatir sama sekali tentang apa yang kau mampu, berapa biaya apa pun. Kami tidak akan khawatir tentang berapa biayanya. Kami tidak akan khawatir tentang apa yang kau mampu, oke?
Kuliah hari ini dimana kamu memenangkan lotre, oke? Kau memenangkan lotre. Uang bukanlah objek. Bagaimana kau berpikir tentang apa yang kau inginkan, oke? Lain kali, kami akan mengatakan, yah, kau tidak memenangkan lotre.
Bahkan, seperti yang kita pelajari di akhir semester, tidak ada yang memenangkan lotre. Ini adalah kesepakatan yang sangat buruk. Tapi lain kali, kami akan memaksakan batasan anggaran. Tapi untuk hari ini, kita hanya akan mengabaikan itu dan berbicara tentang apa yang kamu inginkan, oke? Dan untuk memulai ini, kita akan mulai dengan serangkaian asumsi preferensi. Sebuah seri-- ingat, seperti yang saya bicarakan terakhir kali, model mengandalkan asumsi penyederhanaan. Kalau tidak, kita tidak akan pernah bisa menuliskan model. Itu akan berlangsung selamanya, oke?
And the key question is,
- Are those simplifying assumptions sensible?
- Do they do violence to reality in a way which makes you not believe the model?
- or Are they roughly consistent with reality in a way that allows you to go on with the model? OK?
Preference Assumption
.
And we're going to pose three preference assumptions, which I hope will not violate your sense of reasonableness. The first is completeness. What I mean by that is you have preferences over any set of goods you might choose from. You might be indifferent.
You might say, "I like A as much as B," but you can't say, "I don't know."
You can say, "I don't care." That's indifference.
You can't say, "I don't know."
You can't literally say, "I don't know how I feel about this."
You might say you're indifferent to two things, but you won't say, "I don't know how I feel about something."
That's completeness, OK?
Dan pertanyaan kuncinya adalah,
- Apakah penyederhanaan asumsi itu masuk akal?
- Apakah mereka melakukan kekerasan terhadap kenyataan dengan cara yang membuatmu tidak percaya modelnya?
- Atau Apakah mereka secara kasar konsisten dengan kenyataan dengan cara yang memungkinkanmu untuk melanjutkan model? Oke?
Dan kami akan mengajukan tiga asumsi preferensi, yang saya harap tidak akan melanggar rasa masuk akal Anda. Yang pertama adalah kelengkapan. Yang saya maksud dengan itu adalah Anda memiliki preferensi atas set barang apa pun yang mungkin Anda pilih. Anda mungkin acuh tak acuh.
Anda mungkin berkata, "Saya menyukai A sama seperti B," tetapi Anda tidak bisa mengatakan, "Saya tidak tahu."
Anda dapat mengatakan, "Saya tidak peduli." Itu ketidakpedulian.
Anda tidak bisa mengatakan, "Saya tidak tahu."
Anda tidak dapat secara harfiah mengatakan, "Saya tidak tahu bagaimana perasaan saya tentang ini."
Anda mungkin mengatakan Anda acuh tak acuh terhadap dua hal, tetapi Anda tidak akan mengatakan, "Saya tidak tahu bagaimana perasaan saya tentang sesuatu." Itu kelengkapannya, oke?
The second is the assumption we've all become familiar with since kindergarten math, which is transitivity. If you prefer A to B and B to C, you prefer A to C, OK? That's kind of-- I'm sure that's pretty clear. You've done this a lot in other classes. So these two are sort of standard assumptions you might make in any math class.
The third assumption is the one where the economics comes in, which is the assumption of nonsatiation. Or the assumption of more is better. In this class, we will assume more is always better than less, OK? We'll assume more is better than less.
Now, to be clear, we're not going to say that the next unit makes you equally happy as the last unit. In fact, I'll talk about that in a few minutes. Well, in fact, the next unit makes you less happy. But we will say you always want more, that faced with the chance of more or less, you'll always be happier with more, OK? And that's the nonsatiation assumption, OK?
Yang kedua adalah asumsi yang kita semua sudah akrab sejak matematika taman kanak-kanak, yaitu transitivitas. Jika kau lebih memilih A ke B dan B ke C, Anda lebih memilih A ke C, oke? Itu semacam-- Aku yakin itu cukup jelas. Kau telah melakukan ini, banyak di kelas lain. Jadi keduanya adalah semacam asumsi standar yang mungkin kau buat di kelas matematika mana pun.
Asumsi ketiga adalah asumsi di mana ekonomi masuk, yaitu asumsi tidak puas. Atau asumsi lebih banyak lebih baik. Di kelas ini, kita akan berasumsi lebih, selalu lebih baik daripada kurang, oke? Kami akan berasumsi lebih banyak lebih baik daripada kurang.
Sekarang, untuk memperjelas, kami tidak akan mengatakan bahwa unit berikutnya membuat Anda sama bahagianya dengan unit terakhir. Bahkan, saya akan membicarakannya dalam beberapa menit. Nah, nyatanya, unit berikutnya membuat Anda kurang bahagia. Tapi kami akan mengatakan Anda selalu menginginkan lebih, yang dihadapkan dengan kesempatan lebih atau kurang, Anda akan selalu lebih bahagia dengan lebih banyak, oke? Dan itulah asumsi tidak kenyang, oke?
And I'll talk about that some during the lecture, but that's sort of what's going to give our models their power. That's a sort of new economics assumption. That's going to give-- beyond your typical math assumptions-- this is going to give our models their power, OK? So that's our assumptions. So armed with those, I want to start with a graphical representation of preferences. I want to graphically represent people's preferences, and I'll do so through something we call indifference curves. Indifference curves, OK? These are-- indifference curves are basically preference maps. Essentially, indifference curves are graphical maps of preferences, OK?
So for example, suppose your parents gave you some money to begin the semester, and you spent that money on two things. Your parents are rich. They gave you tons of money. You spent your money on two things, buying pizza or eating cookies, OK? So consider preferences between pizza and cookies. That's your two things you can do. Once again, this is a constrained model. Obviously, in life, you can do a million things with your money. But it turns out, if we consider the contrast between doing two different things with your money, you get a rich set of intuition that you can apply to a much more multi-dimensional decision case. So let's start with a two dimensional decision case.
Dan aku akan membicarakannya beberapa hal itu selama kuliah, tapi itulah yang akan memberi model kita tentang kekuatan mereka. Itu semacam asumsi ekonomi baru. Itu akan memberi-- di luar asumsi matematika khas kalian-- ini akan memberi model kami kekuatan mereka, oke?
Jadi itulah asumsi kami, kaum ekonomi. Jadi dengan bekal itu, aku ingin memulai dengan representasi grafis dari preferensi. Aku ingin mewakili preferensi orang secara grafis, dan aku akan melakukannya melalui sesuatu yang kita sebut kurva ketidakpedulian. Kurva ketidakpedulian, oke? Kurva ketidakpedulian are-- ini pada dasarnya adalah peta preferensi. Pada dasarnya, kurva ketidakpedulian adalah peta grafis preferensi, oke?
Jadi misalnya, misalkan orang tuamu memberi uang untuk memulai semester, dan kau menghabiskan uang itu untuk dua hal. Orang tuamu kaya. Mereka memberimu banyak uang. Kau menghabiskan uangmu untuk dua hal,
membeli pizza atau makan kue, oke?
Jadi pertimbangkan preferensi antara pizza dan kue. Itu adalah dua hal yang dapat kau lakukan. Sekali lagi, ini adalah model yang dibatasi. Jelas, dalam hidup, kau dapat melakukan sejuta hal dengan uangmu. Tetapi ternyata, jika kita mempertimbangkan kontras antara melakukan dua hal yang berbeda dengan uangmu, kau mendapatkan serangkaian intuisi yang kaya, yang dapat kau terapkan pada kasus keputusan yang jauh lebih multi-dimensi. Jadi mari kita mulai dengan kasus keputusan dua dimensi.
You've got your money. Either you can have pizza or you can have cookies, OK? Now, consider three choices, OK? Choice A is two pizzas and one cookie. Choice B is one pizza and two cookies, and choice C is two pizzas, two cookies. OK, that's the three packages I want to compare. And I am going to assume-- and I'll mathematically rationalize in a few minutes-- but for now, I'm going to assume you are indifferent between these two packages. I'm going to assume you're equally happy with two slices of pizza and one cookie or two cookies and one slice of pizza, OK? I'm going to assume that. But I'm also going to assume you prefer option C to both of these.
Kau sudah mendapatkan uang. Entah kau bisa makan pizza atau bisa makan kue, oke? Sekarang, pertimbangkan tiga pilihan, oke?
- Pilihan A adalah dua pizza dan satu kue.
- Pilihan B adalah satu pizza dan dua kue,
- dan pilihan C adalah dua pizza, dua kue.
Oke, itu tiga paket yang ingin saya bandingkan. Dan aku akan berasumsi-- dan aku akan merasionalisasi secara matematis dalam beberapa menit-- tetapi untuk saat ini, aku akan menganggap kau acuh tak acuh di antara dua paket ini. Aku akan menganggap kau sama-sama senang dengan
dua potong pizza dan satu kue,
atau dua kue dan satu potong pizza, oke?
Aku akan berasumsi bahwa… Tetapi aku juga akan menganggapmu lebih memilih opsi C daripada keduanya.
In fact, I'm going to assume that, because that is what more is better gives you, OK? So you're indifferent between this. This indifference doesn't come from any property I wrote up. That's an assumption. That's just-- for this case, I'm assuming that. This comes to the third property I wrote up there. You prefer package C because more is always better than less, OK? So now, let's graph your preferences, and we do so in figure 2-1, OK, in the handout. OK, so here's your indifference curve. So we've graphed on the x-axis your number of cookies, on the y-axis slices of pizza, OK? Now, you have-- we've graphed the three choices I laid here, choice A, which is two slices of pizza and one cookie, choice B, which is two cookies and one slice of pizza, and choice C, which is two of both. And I've drawn on this graph your indifference curves.
Bahkan, aku akan berasumsi bahwa, karena itulah yang lebih baik memberimu, oke? Jadi kau acuh tak acuh antara ini. Ketidakpedulian ini tidak berasal dari properti apa pun yang kutulis. Itu sebuah asumsi. Itu hanya-- untuk kasus ini, aku berasumsi bahwa ini datang ke properti ketiga yang kutulis di sana.
Kau lebih suka paket C karena lebih banyak selalu lebih baik daripada kurang, oke? Jadi sekarang, mari kita grafik preferensimu, dan kami melakukannya pada gambar 2-1, OK, di selebaran. Oke, jadi inilah kurva ketidakpedulianmu. Jadi kami telah membuat grafik pada sumbu x jumlah kuemu, pada irisan pizza sumbu y, oke? Sekarang, kau memiliki--
kami telah membuat grafik tiga pilihan yang kutaruh di sini,
- pilihan A, yaitu dua potong pizza dan satu kue,
- pilihan B, yang merupakan dua kue dan satu potong pizza,
- dan pilihan C, yang merupakan dua dari keduanya.
Dan aku telah menggambar pada grafik ini kurva ketidakpedulianmu.
The way your indifference curves looks is there's one indifference curve between A and B, because those are the points among which you're indifferent. So what an indifference curve represents is all combinations of consumption among which you are indifferent. That's why we call it indifference curve. So an indifference curve, which will be sort of one of the big workhorses of this course, an indifference curve represents all combinations along which you are in different. You're indifferent between A and B. Therefore, they lie on the same curve, OK? So that's sort of our preference map, our indifference curves.
Cara kurva ketidakpedulianmu terlihat adalah ada satu kurva ketidakpedulian antara A dan B, karena itu adalah titik2 di mana kau acuh tak acuh. Jadi apa yang diwakili oleh kurva ketidakpedulian adalah semua kombinasi konsumsi di antaranya kau acuh tak acuh.
Itu sebabnya kami menyebutnya kurva ketidakpedulian. Jadi kurva ketidakpedulian, yang akan menjadi semacam salah satu pekerja keras besar dari kuliah ini. Kurva ketidakpedulian mewakili semua kombinasi di mana kau berbeda. Kau acuh tak acuh antara A dan B. Oleh karena itu, mereka berbaring di kurva yang sama, oke? Jadi itu semacam peta preferensi kami, kurva ketidakpedulian kami.
And these indifference curves are going to have four properties, four properties that you have to-- that follow naturally from this-- it's really three and 1/2. The third and fourth are really pretty much the same, but I like to write them out as four. Four properties that follow from these underlying assumptions-- Property one is, consumers prefer higher indifference curves. Consumers prefer higher indifference curves, OK?And that's just all from more is better. That is, an indifference curve that's higher goes through package that has at least as much of one thing and more of the other thing. Therefore, you prefer it, OK? So as indifference curve shifts out, people are happier, OK? So on that higher indifference curve, point C, you are happier than points A and B, because more is better, OK?
Dan kurva ketidakpedulian ini akan memiliki empat properti, empat properti yang harus kau-- yang mengikuti secara alami dari ini-- itu benar-benar tiga dan 1/2. Yang ketiga dan keempat benar-benar hampir sama, tetapi aku suka menuliskannya sebagai empat. Empat properti yang mengikuti dari asumsi yang mendasari ini--
Properti satu adalah, konsumen lebih memilih kurva ketidakpedulian yang lebih tinggi. Konsumen lebih memilih kurva ketidakpedulian yang lebih tinggi, oke? Dan itu saja dari more is better. Artinya, kurva ketidakpedulian yang lebih tinggi melewati paket yang memiliki setidaknya satu hal dan lebih banyak hal lainnya. Oleh karena itu, kau lebih suka, oke? Jadi saat kurva ketidakpedulian bergeser, orang-orang lebih bahagia, oke? Jadi pada kurva ketidakpedulian yang lebih tinggi itu, titik C, Anda lebih bahagia dari poin A dan B, karena lebih banyak lebih baik, oke?
The second is that indifference curves never cross. Indifference curves never cross, OK? Actually, that's third, actually. I want to come to that in order. Second--
Third is the indifference curves never-- Second is indifference curves are downward sloping. Second is indifference curves are downward sloping. Indifference curves are downward sloping. Let's talk about that first, OK? That simply comes from the principle of nonsatiation. So look at figure 2-2. Here's an upward sloping indifference curve, OK? Why does that violate the principle of nonsatiation? Why does that violate that? Yeah.
Yang kedua adalah kurva ketidakpedulian tidak pernah bersilangan. Kurva ketidakpedulian tidak pernah menyeberang, oke? Sebenarnya, itu yang ketiga, sebenarnya. Saya ingin datang ke itu secara berurutan. Kedua--
Ketiga adalah kurva ketidakpedulian tidak pernah-- Kedua adalah kurva ketidakpedulian miring ke bawah. Kedua adalah kurva ketidakpedulian yang miring ke bawah. Kurva ketidakpedulian miring ke bawah. Mari kita bicarakan itu dulu, oke? Itu hanya berasal dari prinsip ketidakpuasan. Jadi lihat gambar 2-2. Ini adalah kurva ketidakpedulian yang miring ke atas, oke? Mengapa itu melanggar prinsip tidak kenyang? Mengapa itu melanggar itu? Ya.
AUDIENCE: Either, if you're-- either you're less happy with you have more cookies, or you're less happy if you have more pizza. And like there's-- and that violates nonsatiation.
JONATHAN GRUBER: Exactly. So basically, you're indifferent-- on this curve, you're indifferent with one of each and two of each. You can't be indifferent. Two of each has got to be better than one of each. So an upward sloping indifference curve would violate nonsatiation. So that's the second property of indifference curve. The third property of indifference curve is the indifference curves never cross, OK? We could see that in figure 2-3, OK? Someone else tell me why this violates the properties I wrote up there, indifference curves crossing.Yeah.
MAHASISWA: Entah, jika kau-- entah kau kurang senang dengan memiliki lebih banyak kue, atau kau kurang senang jika memiliki lebih banyak pizza. Dan seperti ada-- dan itu melanggar ketidakpuasan.
JONATHAN GRUBER: Tepat. Jadi pada dasarnya, kau acuh tak acuh-- pada kurva ini. Kau acuh tak acuh dengan satu dari masing-masing dan dua masing-masing. Kau tidak bisa acuh tak acuh. Dua dari masing-masing harus lebih baik dari satu dari masing-masing.
Jadi kurva ketidakpedulian yang miring ke atas akan melanggar ketidakpuasan. Jadi itulah properti kedua dari kurva ketidakpedulian.
Properti ketiga dari kurva ketidakpedulian adalah kurva ketidakpedulian tidak pernah menyeberang, oke? Kita bisa melihatnya pada gambar 2-3, oke? Orang lain memberitahuku mengapa ini melanggar properti yang saya tulis di sana? Kurva ketidakpedulian menyeberang. Ya.
AUDIENCE: Because B and C is strictly better.
JONATHAN GRUBER: What's that?
AUDIENCE: Because B and C, B is strictly better.
JONATHAN GRUBER: Because the B and C, B is strictly better. That's right.
AUDIENCE: [INAUDIBLE]
JONATHAN GRUBER: But they're alsoboth on the same curve as A. So you're saying they're both-- you're indifferent with A for both B and C, but you can't be, because B is strictly better than C. So it violates transitivity, OK? So the problem with crossing indifference curves is they violate transitivity.
And then finally, the fourth is sort of a cute extra assumption, but I think it's important to clarify, which is that there is only one indifference curve through every possible consumption bundle, only one IC through every bundle. OK, you can't have two indifference curves going through the same bundle, OK? And that's because of completeness. If you have two indifference curves going through the same bundle, you wouldn't know how you felt, OK? So there can only be one going through every bundle, because you know how you feel. You may feel indifferent, but you know how you feel. You can't say I don't know, OK? So that's sort of a extra assumption that sort of completes the link to the properties, OK?
MAHASISWA: Karena B dan C benar-benar lebih baik.
JONATHAN GRUBER: Apa itu?
MAHASISWA: Karena B dan C, B benar-benar lebih baik.
JONATHAN GRUBER: Karena B dan C, B benar-benar lebih baik. Itu benar.
PENONTON: [TAK TERDENGAR]
JONATHAN GRUBER: Tapi mereka juga berada di kurva yang sama dengan A. Jadi kau mengatakan mereka berdua-- kau acuh tak acuh dengan A untuk (B dan C), tetapi kau tidak bisa. Karena B benar-benar lebih baik daripada C. Jadi itu melanggar transitivitas, oke? Jadi masalah dengan melintasi kurva ketidakpedulian adalah mereka melanggar transitivitas.
Bila barang X lebih disukai dari Y (X>Y) dan barang Y lebih disukai dari Z (Y>Z), maka barang X lebih disukai dari Z (X>Z). Konsep ini disebut Transitivitas (Transitivity).
Dan akhirnya, yang keempat adalah semacam asumsi ekstra yang lucu, tetapi kupikir itu penting untuk diklarifikasi, yaitu bahwa hanya ada satu kurva ketidakpedulian melalui setiap bundel konsumsi yang mungkin. Hanya satu IC melalui setiap bundel. Oke, kau tidak dapat memiliki dua kurva ketidakpedulian melalui bundel yang sama, oke? Dan itu karena completeness.
Kelengkapan ( Completeness ) Prinsip ini mengatakan bahwa setiap individu selalu dapat menentukan keadaan mana yang lebih disukainya diantara dua keadaan.
Jika kau memiliki dua kurva ketidakpedulian melalui bundel yang sama, kau tidak akan tahu bagaimana perasaanmu, oke? Jadi hanya ada satu yang melewati setiap bundel, karena kau tahu bagaimana perasaanmu. Kau mungkin merasa acuh tak acuh, tetapi kau tahu bagaimana perasaanmu. Kau tidak bisa mengatakan aku tidak tahu, oke? Jadi itu semacam asumsi tambahan yang melengkapi tautan ke properti, oke?
So that's basically how indifference curves work. Now, I find-- when I took this course, before you were--god, maybe before your parents were born, I don't know, certainly before you guys were born-- when I took this course, I found this course full of a lot of light bulb moments, that is, stuff was just sort of confusing, and then boom, an example really made it work for me.
And the example that made indifference curves work to me was actually doing my first UROP. When my UROP was with a grad student, and that grad student Real Example ( job search ) had to decide whether he was going to accept a job. He had a series of job offers, so he had to decide. And basically, he said, "Here's the way I'm thinking about it. I am indifferent-- I have an indifference map and I care about two things. I care about school location and I care about economics department quality. I care about the quality of my colleagues, and the research it's done there, and the location." And basically, he had two offers. One was from Princeton, which he put up here. No offense to New Jerseyans, but Princeton as a young single person sucks. OK, fine when you're married and have kids, but deadly as a young single person. And the other-- so that's Princeton.
Jadi pada dasarnya begitulah cara kerja kurva ketidakpedulian. Sekarang, aku menemukan-- ketika aku mengambil kuliah ini, sebelummu-- Oh, bahkan mungkin sebelum orang tuamu lahir, aku tidak tahu, tapi tentu saja sebelum kalian lahir--- Ketika aku mengambil kuliah ini, aku menemukan kuliah ini penuh dengan banyak momen bola lampu, yaitu, hal-hal yang agak membingungkan, dan kemudian boom, sebuah contoh benar-benar membuatnya bekerja untukku.
Dan contoh yang membuat kurva ketidakpedulian bisa mencerahkanku adalah ketika aku mengikuti kuliah UROP pertamaku. Ketika UROP, aku bersama seorang mahasiswa pascasarjana. Dan mahasiswa pascasarjana itu Contoh Nyata (pencarian pekerjaan) harus memutuskan apakah dia akan menerima pekerjaan. Dia memiliki serangkaian tawaran pekerjaan, jadi dia harus memutuskan.
Dan pada dasarnya, dia berkata, "Inilah caraku memikirkannya. Aku acuh tak acuh-- Aku memiliki peta ketidakpedulian dan peduli tentang dua hal.
- Aku peduli dengan lokasi sekolah
- dan aku peduli dengan kualitas departemen ekonomi.
Aku peduli dengan kualitas rekan-rekanku, dan penelitian yang dilakukan di sana, dan lokasinya." Dan pada dasarnya, dia mendapat dua tawaran. Salah satunya dari Princeton, yang dia pasang di sini. Tidak ada pelanggaran terhadap warga New Jersey, tetapi Princeton sebagai lajang muda menyebalkan. OK, baik-baik saja ketika kau sudah menikah dan memiliki anak, tetapi mematikan sebagai orang lajang muda. Dan yang lain-- jadi itu Princeton.
Down here was Santa Cruz. OK, awesome, is the most beautiful university in America, OK? But not as good an economics department. And he decided he was roughly indifferent between the two. But he had a third offer from the IMF, which is a research institution in DC, which has-- he had a lot of good colleagues, and DC is way better than Princeton, New Jersey, even though it's not as good as Santa Cruz. So he decided he would take the offer at the IMF, OK? Even though the IMF had worse colleagues than Princeton and worse location than Santa Cruz, it was still better in combination of the two of them, given his preferences. And that's how he used indifference curves to make his decision, OK? So that's sort of an example of applying it. Once again, no offense to the New Jerseyans in the room, of which I am one, but believe me, you'd rather be in Santa Cruz.
Di bawah sini adalah Santa Cruz. Oke, luar biasa. Itu adalah universitas terindah di Amerika, oke? Tapi tidak sebagus departemen ekonomi. Dan dia memutuskan dia secara kasar acuh tak acuh di antara keduanya. Tetapi dia mendapat tawaran ketiga dari IMF, yang merupakan lembaga penelitian di DC, yang memiliki-- dia memiliki banyak rekan yang baik, dan DC jauh lebih baik daripada Princeton, New Jersey, meskipun tidak sebagus Santa Cruz.
Jadi dia memutuskan dia akan menerima tawaran di IMF, oke? Meskipun IMF memiliki rekan yang lebih buruk daripada Princeton dan lokasi yang lebih buruk daripada Santa Cruz, itu masih lebih baik dalam kombinasi dari mereka berdua, mengingat preferensinya. Dan begitulah cara dia menggunakan kurva ketidakpedulian untuk membuat keputusannya, oke? Jadi itu semacam contoh penerapannya.
Sekali lagi, jangan tersinggung dengan warga New Jersey di ruangan itu, di mana aku salah satunya, tetapi percayalah, kau lebih suka berada di Santa Cruz.
OK, so now, let's go from preferences to utility functions. OK, so now, we're going to move from preferences, which we've represented graphically, to utility functions, which we're going to represent mathematically. Remember, I want you understand, everything this course at three levels,
- graphically,
- mathematically,
- and most importantly of all, intuitively, OK?
So graphic is indifference curves. Now we come to the mathematical representation, which is utility function, OK?
And the idea is that every individual, all of you in this room, have a stable, well behaved, underlying mathematical representation of your preferences, which we call utility function. Now, once again, that's going to be very complicated, your preference over lots of different things. We're going to make things simple by writing out a two dimensional representation for now of your indifference curve. We're going to say, how do we act mathematically represent your feelings about pizza versus cookies? OK? Imagine that's all you care about in the world, is pizza and cookies. How do we mathematically represent that? So for example, we could write down that your utility function is equal to the square root of the number of slices of pizza times the number of cookies. We could write that down. I'm not 1qq1q11ààsaying that's right.
Oke, jadi sekarang, mari kita beralih dari preferensi ke fungsi utilitas. Oke, jadi sekarang, kita akan beralih dari preferensi, yang telah kita wakili secara grafis, ke fungsi utilitas, yang akan kita wakili secara matematis. Ingat, aku ingin kau mengerti, semua kuliah ini pada tiga tingkat,
- secara grafis,
- matematis,
- dan yang paling penting dari semuanya, secara intuitif, oke?
Nah jadi grafik adalah kurva ketidakpedulian. Sekarang kita sampai pada representasi matematika, yang merupakan fungsi utilitas, oke?
Fungsi utilitas ini berguna untuk mengukur tingkat kepuasan para konsumen dalam mengkonsumsi sebuah barang atau jasa
Dan idenya adalah bahwa setiap individu, kau semua di ruangan ini, memiliki representasi matematis yang stabil, berperilaku baik, dan mendasari preferensimu, yang kami sebut fungsi utilitas. Sekarang, sekali lagi, itu akan menjadi sangat rumit, preferensimu atas banyak hal yang berbeda.
Kami akan membuat segalanya menjadi sederhana dengan menuliskan representasi dua dimensi untuk saat ini dari kurva ketidakpedulianmu. Kami akan mengatakan, bagaimana kami bertindak secara matematis mewakili perasaanmu tentang pizza versus kue, Oke?
Bayangkan itu saja yang kau pedulikan di dunia, adalah pizza dan kue. Bagaimana kita secara matematis mewakili itu? Jadi misalnya, kita dapat menuliskan bahwa fungsi utilitas kalian sama dengan akar kuadrat dari jumlah irisan pizza kali jumlah kue. Kita bisa menuliskannya.
I'm not saying it works for anyone in this room or even everyone this room, but that is a possible way to represent utility, OK? What this would say-- this is convenient. We will use-- we'll end up using square root form a lot for utility functions and a lot of convenient mathematical properties. And it happens to jive with our example, right? Because in this example, you're indifferent between two pizza and one cookie or one pizza and two cookie. They're both square root of 2. And you prefer two pizza and two cookies. That's two, OK? So this gives you a high utility for two pizza and two cookies, OK, than one pizza and two cookie, or two pizza and one cookie. So now, the question is, what does this mean? What is utility? Well, utility doesn't actually mean anything. There's not really a thing out there called utiles OK?
Aku tidak mengatakan itu bekerja untuk siapa pun di ruangan ini. Atau bahkan semua orang di ruangan ini. Tetapi itu adalah cara yang mungkin untuk mewakili utilitas, oke? Apa yang akan dikatakan ini-- nyaman, Kami akan menggunakan-- kami akan menggunakan banyak bentuk akar kuadrat untuk fungsi utilitas dan banyak properti matematika yang nyaman.
Dan itu terjadi pada jive dengan contoh kita, kan? Karena dalam contoh ini, kau acuh tak acuh antara
- dua pizza dan satu kue
- atau satu pizza dan dua kue.
Mereka berdua adalah akar kuadrat dari 2. Dan aku lebih suka dua pizza dan dua kue. Itu dua, oke? Jadi ini memberimu utilitas tinggi untuk dua pizza dan dua kue, OK, daripada satu pizza dan dua kue, atau dua pizza dan satu kue.
Jadi sekarang, pertanyaannya adalah, apa artinya ini? Apa itu utilitas? Yah, utilitas sebenarnya tidak berarti apa-apa. Tidak ada yang benar-benar ada di luar sana yang disebut utilis, OK?
In other words, utility is not a cardinal concept. It is only an ordinal concept. You cannot say your utility, you are--you cannot literally say, "My utility is x% higher than your utility," but you can rank them. So we're going to assume that utility can be ranked to allow you to rank choices. Even if generally, we might slip some and sort of pretend utility is cardinal for some cute examples, but by and large, we're going to think of utility as purely ordinal. It's just a way to rank your choices. It's just when you have a set of choices out there over many dimensions-- like if your choice in life was always over one dimension and more was better, it would always be easy to rank it, right? You'd never have a problem. Once your choice is over more than one dimension, now if you want to rank them, you need some way to combine them. That's what this function does. It allows you essentially to weight the different elements of your consumption bundle, so you can rank them when it comes time to choose, OK? Now, this is obviously incredibly simple, but it turns out to be amazingly powerful in explaining real world behavior, OK? And so what I want to do today is work with the underlying mathematics of utility, and then we'll come back. We'll see in the next few lectures how it could actually be used to explain decisions.
Dengan kata lain, utilitas bukanlah konsep kardinal. Itu hanya konsep ordinal.
Kau tidak dapat mengatakan utilitasmu, --Kau tidak dapat secara harfiah mengatakan, "Utilitasku x% lebih tinggi dari utilitasmu," tetapi kau dapat memberi peringkat mereka.
Jadi kami akan berasumsi bahwa utilitas dapat diberi peringkat untuk memungkinkanmu menentukan peringkat pilihan. Bahkan jika secara umum, kita mungkin menyelipkan beberapa dan semacam utilitas pura-pura adalah kardinal untuk beberapa contoh lucu. Tetapi pada umumnya, kita akan menganggap utilitas sebagai murni ordinal. Itu hanya cara untuk menentukan peringkat pilihanmu. Hanya ketika kau memiliki serangkaian pilihan di luar sana, di banyak dimensi-- seperti jika pilihanmu.
Dalam hidup selalu lebih dari satu dimensi, dan lebih banyak lebih baik. Akan selalu mudah untuk memberi peringkat, bukan? Anda tidak akan pernah memiliki masalah. Setelah pilihan Anda lebih dari satu dimensi, sekarang jika Anda ingin memberi peringkat, Anda memerlukan beberapa cara untuk menggabungkannya. Itulah yang dilakukan fungsi ini. Ini pada dasarnya memungkinkan Anda untuk menimbang elemen yang berbeda dari bundel konsumsi Anda, sehingga Anda dapat memberi peringkat ketika tiba saatnya untuk memilih, oke? Sekarang, ini jelas sangat sederhana, tetapi ternyata sangat kuat dalam menjelaskan perilaku dunia nyata, oke? Dan apa yang ingin saya lakukan hari ini adalah bekerja dengan matematika utilitas yang mendasarinya, dan kemudian kita akan kembali. Kita akan melihat dalam beberapa kuliah berikutnya bagaimana itu benar-benar dapat digunakan untuk menjelaskan keputusan.
Margin Utility So a key concept we're going to talk about in this class is marginal utility. Marginal utility is just a derivative of the utility function with respect to one of the elements. So the marginal utility for cookies, of cookies, is the utility of the next cookie, given how many cookies you've had. This class is going to be very focused on marginal decision making.
In economics, it's all about how you think about the next unit. Turns out, that makes life a ton easier. Turns out, it's way easier to say, "Do you want the next cookie," than to say, "How many cookies do you want?" Because if you want the next cookie, that's sort of a very isolated decision. You say, OK, I had this many cookies. Do I want the next cookie? Whereas before you start eating, if you say, how many cookies do you want, that's sort of a harder, more global decision. So we're going to focus on this stepwise decision making process of do you want the next unit, the next cookie, or the next slice of pizza, OK? And the key feature of utility functions we'll work with throughout the semester is that they will feature diminishing marginal utility. Marginal utility will fall as you have more of a good. The more of a good you've had, the less happiness you'll derive from the next unit, OK?
Now, we can see that graphically in figure 2-4. Figure 2-4 graphs on the x-axis the number of cookies holding constant pizza. So let's say you're having two pizza slices, and you want to say, what's my benefit from the next cookie? And on the left axis, violating what I just said like 15 seconds ago, we graph utility. Now, once again, the utile numbers don't mean anything. It's just to give you an ordinal sense. What you see here is that if you have 1 cookie, your utility is 1.4, square root of 2 times 1. If you have 2 cookies, your utility goes up to square root of 4, which is 2. You are happier with 2 cookies, but you are less happy from the second cookie than the first cookie, OK? And you could see that in figure-- if you flip back and forth between 2-4 and 2-5, you can see that, OK?
The first cookie, going from 0 to 1 cookie, gave you one-- so in this case, we're now graphing the marginal utility. So figure 2-4 is the level of utility, which is not really something you can measure, in fact. Figure 2-5 is something you can measure, which is marginal utility, what's your happiness-- and we'll talk about measuring this-- from the next cookie. You see, the first cookie gives you a utility increment of 1.4, OK? You go from utility of 0 to utility of 1.4. The next cookie gives you utility increment of 0.59.
OK, you go from utility of 1.41 to utility of 2. The next cookie gives utility increment of 0.45, the square root of 3. So now we flip back to the previous page. We're going from the square root of 4, we're going from the square root of 4-- I'm sorry-- to the square root of 6. Square root of 6 is only 0.45 more than the square root of 4, and so on. So each additional cookie makes you less and less happy.
It makes you happier, it has to, because more is better, but it makes you less and less happy, OK?And this makes sense. Just think about any decision life starting with nothing of something and having the first one, slice of pizza, a cookie, deciding on which movie to go to. The first movie, the one you want to see the most, is going to make you happier than the one you want to see not quite as much. The first cookie when you're hungry will make you happier than the second cookie.
The first slice of pizza make you happier-- Now, you may be close to indifferent. Maybe the second slice of pizza makes you almost as happy as the first. But the first will make you happier, OK? If you think about-- that's really sort of that first step. You were hungry, and that first one makes you feel happier. Now, but you got to remember, you always want more cookies.
Now, you might say, "Wait a second. This is stupid. Once I've had 10 cookies, I'm going to barf. The 11th cookie can actually make me worse off, because I don't like barfing." But in economics, we have to remember, you don't have to eat the 11th cookie. You can give it away. So if like say, you don't want the 11th cookie, you can save it for later. You can give it to a friend. So you always want it. In the worst case, you throw it out. It can't make you worse off, it can only make you better off. And that's what our sort of more is better assumption comes from. Obviously, the limit-- you know, if you get a million cookies, your garbage can gets full. You have no friends to give them to. I understand at the limit, these things fall apart, OK? But that's the basic idea of more is better and the basic idea of diminishing marginal utility. OK, any questions about that?
Yeah.
AUDIENCE: Can the utility function ever be negative?
JONATHAN GRUBER: Utility function can never be negative because we have-- well, utility-- once again, utility is not an ordinal concept. You can set up utility functions such that the number is negative. You can set that up. OK, the marginal utility is always positive.
You always get some benefit from the next unit. Utility, once again, the measurement's relevant. So it could be negative. You could set it up-- I could write my utility function like this, you know, something like that. So it could be negative. That's just a sort of scaling factor. But marginal utility is always positive. You're always happier, or it's non-negative. You're always happier or at least indifferent to getting the next unit. Yeah.
AUDIENCE: So when you're looking at 2-5, if you get like a fraction of a cookie, is the marginal utility still going to go up?
JONATHAN GRUBER: I'm sorry, you look-- figure 2-5-- no, the marginal is going to go down. Each fraction of a cookie, the marginal utility-- marginal utility is always diminishing.
AUDIENCE: So if you start with zero, and you get 1/2 a cookie based on this graph--
JONATHAN GRUBER: Well, it's really hard to do it from zero. That's really tricky. It's sort of much easier to start from one. So corner solutions, we'll talk about corner solutions in this class, they get ugly. Think of it starting from one. Starting with that first cookie, every fraction of a cookie makes you happier, but less and less happy with each fraction. Good question. All right, good questions. All right, so now, let's talk about--let's flip back from the math to the graphics, and talk about where indifference curves come from. I just drew them out. But in fact, indifference curves are the graphical representation of what comes out of utility function, OK? And indeed, the slope of the indifference curve, we're going to call the marginal rate of substitution, the rate essentially at which you're willing to substitute one good for the other.
The rate at which you're willing to substitute cookies for pizza is your marginal rate of substitution. And we'll define that as the slope of the indifference curve, delta p over delta c. That is your marginal rate of substitution. Literally, the indifference curve tells you the rate at which you're willing to substitute.
You just follow along and say, "Look, I'm willing to give up--" So in other words, if you look at figure 2-6, you say, "Look, I'm indifferent between point A to point B. One slice of pizza-- I'm sorry-- one cookie and four slices of pizza is the same to me as two cookies and two slices of pizza." Why is it the same? Because they both give me utility square root of four, right? So given this mathematical-- I'm not saying you are. I'm saying, given this mathematical representation, OK, you are indifferent between point A and point B. So what that says-- and what's the slope with the indifference curve? What's the arc slope between point A and point B?
The slope is negative 2. So your marginal rate of substitution is negative 2. You are indifferent, OK? You are indifferent between 1, 4 and 2, 2. Therefore, you're willing to substitute or give away two slices of pizza to get one cookie. Delta p delta c is negative 2, OK? Now, it turns out you can define the marginal rate of substitution over any segment of indifference curve, and what's interesting is it changes. It diminishes. Look what happens when we move from two pizzas and two cookies, from point B to point C. Now the marginal rate of substitution is only negative of 1/2. Now I'm only willing to give up one slice of pizza to get two cookies. What's happening? First, I was willing give up two slices of pizza to get one cookie. Now I'm only willing to give up one slice of pizza to get two cookies. What's happening? Yeah.
AUDIENCE: You don't want a cookie as much?
JONATHAN GRUBER: Because of?
AUDIENCE: Diminishing marginal utility.
JONATHAN GRUBER: Exactly. Diminishing margin utility has caused the marginal rate of substitution itself to diminish. For those who are really kind of better at math than I am, it turns out technically, mathematically, marginal utility isn't always diminishing. You can draw up cases. MRS is always diminishing. So you can think of marginal as always diminishing. It's fine for this class. When you get to higher level math and economics, you'll see marginal utility doesn't have to diminish. MRS has to diminish, OK? MRS is always diminishing. As you go along the indifference curve, that slope is always falling, OK?
So basically, what we can right now is how the MRS relates to utility function. Our first sort of mind-blowing result is that the MRS is equal to the negative of the marginal utility of cookies over the marginal utility of pizza. That's our first key definition. It's equal to the negative of the marginal utility of the good on the x-axis over the marginal utility of the good on the y-axis, OK? Essentially, the marginal rate of substitution tells you how your relative marginal utilities evolve as you move down the indifference curve. When you start at point A, you have lots of pizza and not a lot of cookies. When you have lots of pizza, your marginal utility is small. Here's the key insight. This is the thing which, once again, it's a light bulb thing. If you get this, it'll make your life so much easier.
Marginal utilities are negative functions of quantity. The more you have of a thing, the less you want the next unit of it. That's why, for example, cookies is now in the numerator and pizza is in the denominator, flipping from this side, OK? The more you have a good, the less you want it. So start at point A. You have lots of pizza and not a lot of cookies. You don't really want more pizza. You want more cookies. That means the denominator is small. The marginal utility of pizza is small. You don't really want it. But the marginal utility of cookies is high. You want many of them. So this is a big number. Now let's move to point B. Think about your next decision. Well, now, your marginal utility of pizza, if you were going to go from two to one slice of pizza, now pizza is worth a lot more than cookies. So now it gets smaller. So essentially, as you move along that indifference curve, because of this, you want-- because of diminishing marginal utility, it leads this issue of a diminishing marginal rate substitution, OK?
So basically, as you move along the indifference curve, you're more and more willing to give up the good on the x-axis to get the good on the y-axis. As you move from the upper left to the lower right on that indifference map, figure 2-6, you're more you're more willing to give up the good on the x-axis to get the good on the y-axis. And what this implies is that indifference curves are-- indifference curves are convex to the origin.
Why graph's not concave
Indifference curves are convex to the origin. That's very important. OK, let's see, they are not concave. They're either convex or straight. Let's say they're not concave to the origin, to be technical. Indifference curves can be linear. We'll come to that. But they can't be concave to the origin.
Why? Well, let's look at the next figure, the last figure, figure 2-7. What would happen if indifference curves were concave to the origin? Then that would say, moving from one pizza-- so now I've drawn a concave indifference curve. And with this indifference curve, moving from point A to point B leaves you indifferent.
So you're happy to give up one slice of pizza to get one cookie. Starting with four slices of pizza and one cookie, you were happy to give up one slice of pizza to get one cookie. Now, starting from two and three, you're now willing to give up two slices of pizza to get one cookie. What does that violate? Why does that not make sense? Yeah.
AUDIENCE: Law of diminishing marginal returns?
JONATHAN GRUBER: Yeah, law of diminishing marginal utility. Here, you were happy to have one slice of pizza to get one cookie. Now you are willing to have two slices of pizza to get one cookie, even though you have less pizza and more cookies. That can't be right. As you have less pizza and more cookies, cookies--pizza should become more valuable, not less valuable, and cookies should become less valuable, not more valuable. So a concave to the origin indifference curve would violate the principle of diminishing marginal utility and diminishing marginal rate of substitution, OK? Yeah.
AUDIENCE: What if it's like something like trading cards?
JONATHAN GRUBER: OK.
AUDIENCE: I mean, as you get more trading cards, you have-- you're already made a complete set.
JONATHAN GRUBER: That's very interesting. So in some sense, what that is saying is that your utility function is really over set. You're saying your utility functions isn't over trading cards. It's over sets. So basically, that's what's sort of a bit-- you know, our models are flexible. One way is to say they're loose. Another way is to say they're flexible. But one of the challenges you'll face on this course is thinking about what is the decision set over which I'm writing my utility function? You're saying it's sets, not trading cards. So that's why it happens. (Q) Addictives & MRS
Other questions?
Good question. Yeah, at the back.
AUDIENCE: What about like addictive things, where like, the more you have it, the more you want to buy?
JONATHAN GRUBER: Yeah, that's a really relishing question. I spent a lot of my research life, actually-- I did a lot of research for a number of years on thinking about how you properly model addictive decisions like smoking. Addictive decisions like smoking, essentially, it really is that your utility function itself shifts as you get more addictive. It's not that your marginal utility-- the next cigarette is still worth less than the first cigarette. It's just that as you get more addicted, that first cigarette gets worth more and more to you. So when you wake up in the morning feeling crappy, that first cigarette still does more for you than the second cigarette. It's just, the next day you wake up feeling crappier, OK?
So we model addiction as something where essentially, each day, cigarettes do less and less for you. You get essentially adjusted to new-- you habituate to higher levels. And this is why I do a lot of work-- you know, this is why, unfortunately, we saw last year, the number-- the highest number of deaths from accidental overdose in US history. 72,000 people died from drug overdoses last year, more than ever died in traffic accidents in our nation's history, OK? Why? Because people get habituated to certain levels, and they get habituated to certain levels. So people get hooked on Oxycontin.
They get habituated to a certain level. They maybe switch to heroin, and they habituate to a certain level. And now there's this thing called fentanyl, which is a synthetic opioid brought over from China, which is incredibly powerful. And dealers are mixing the fentanyl in with the heroin. And the people shoot up, not realizing-- at their habituated level-- not realizing they have this dangerous substance, and they overdose and die. àAnd that's because they've got habituated to high levels. They don't realize they're getting a different product. So it's not about not diminishing marginal utility.
It's about different-- underlying different products. All right? Other questions? Sorry for that depressing note, but it's important to be thinking about that. That's why, once again, we're the dismal science. We have to think about these things. Price of Different Sizes of Goods. OK, now, let's come to a great example that I hope you've wondered about, and maybe you've already figured out in your life, but I hope you've at least stopped and wondered about, which is the prices of different sizes of goods, in a convenience store, say. OK, take Starbucks.
You can get a tall iced coffee for 2.25, or the next size, whatever the hell they call it, bigger, OK?
You can get, for 70 more cents-- so 2.25, and you can double it for 70 more cents. Or take McDonald's. A small drink is $1.22 at the local McDonald's, but for 50 more cents, you can double the size, OK?
What's going on here?
Why did they give you twice as much liquid, or if you go for ice cream, it's the same thing?
Why do they give you twice as much for much less than twice as much money? What's going on? Yeah.
AUDIENCE: Since your marginal utility is diminishing as you have more coffee available to you, you're willing to pay less for it, so they make the additional coffee cheaper.
JONATHAN GRUBER: Exactly. That's a great way to explain it. The point is it's all about diminishing marginal utility. OK, when you come in to McDonald's on a hot day, you are desperate for that soda, but you're not as desperate have twice as much soda. You'd like it. You probably want to pay more for it, but you don't like it nearly as much as that first bit of soda. So those prices simply reflects the market's reaction to understanding diminishing marginal utility.
PENONTON: Karena utilitas marjinal kau berkurang, karena memiliki lebih banyak kopi yang tersedia untukmu. Kau bersedia membayar lebih sedikit untuk itu, sehingga mereka membuat kopi tambahan lebih murah.
JONATHAN GRUBER: Tepat. Itu cara yang bagus untuk menjelaskannya. Intinya adalah ini semua tentang mengurangi utilitas marjinal. OK, ketika kau datang ke McDonald's pada hari yang panas, kau sangat membutuhkan soda itu. Tetapi kau tidak putus asa memiliki soda dua kali lebih banyak. Kau akan menyukainya. Kau mungkin ingin membayar lebih untuk itu, tetapi tidak menyukainya hampir sebanyak sedikit soda pertama itu. Jadi harga-harga itu hanya mencerminkan reaksi pasar untuk memahami berkurangnya utilitas marjinal.
Now, we haven't even talked about the supply side of the market yet. I'm not getting to how providers make decisions. That's a much deeper issue. I'm just saying that this is diminishing marginal utility in action, how it works in the market, and that's why you see this, OK?
So basically, what you see is that that first bite of ice cream, for example, is worth more, and that's why the ice cream that's twice as big doesn't cost twice as much. Now, so basically, what this means is, if you think about our demand and supply model, on a hot day, or any day, the demand for the first 16 ounces is higher than the demand for the second 16 ounces. But the cost of producing 16 ounces is the same.
So let's think about this. It's always risky when I try to draw a graph on the board, but let's bear with me. OK, so let's say we've got a simple supply and demand model.
Sekarang, kami bahkan belum berbicara tentang sisi penawaran pasar. Aku tidak mengerti bagaimana penyedia membuat keputusan. Itu masalah yang jauh lebih dalam. Aku hanya mengatakan bahwa ini mengurangi utilitas marjinal dalam tindakan,
bagaimana cara kerjanya di pasar, dan itulah mengapa kau melihat ini, oke?
Jadi pada dasarnya, apa yang kau lihat adalah bahwa gigitan pertama es krim, misalnya, lebih berharga, dan itulah mengapa es krim yang dua kali lebih besar harganya tidak dua kali lebih mahal. Sekarang, jadi pada dasarnya, apa artinya ini adalah, jika kau berpikir tentang model permintaan dan penawaran kami, pada hari yang panas, atau hari apa pun, permintaan untuk 16 ons pertama lebih tinggi daripada permintaan untuk 16 ons kedua. Tetapi biaya produksi 16 ons adalah sama. Jadi mari kita pikirkan ini.
Selalu berisiko ketika aku mencoba menggambar grafik di papan tulis, tapi mari kita bersabar. Oke, jadi katakanlah kita memiliki model penawaran dan permintaan yang sederhana.
You have this supply function for soda, and let's assume it's roughly flat. OK, let's assume sort of the cost the firm proceeds within some range. The firm-- basically, every incremental 16 ounces costs them the same. So that's sort of their supply curve. And then you have some demand curve, OK? You have some demand curve which is downward sloping, OK, and they set some price. And this is the demand for 16 ounces. Now, what's the demand for the next 16 ounces, OK? Yeah, this isn't going to work. We have to have an upward-sloping supply curve. Sorry about that. We have a slightly upward sloping supply curve, OK?
Kau memiliki fungsi pasokan untuk soda ini, dan anggap saja itu kira-kira datar. Oke, mari kita asumsikan biaya yang dihasilkan perusahaan dalam kisaran tertentu. Perusahaan-- pada dasarnya, setiap penambahan 16 ons biayanya sama. Jadi itu semacam kurva penawaran mereka. Dan kemudian kau memiliki kurva permintaan, oke? kau memiliki kurva permintaan yang miring ke bawah, oke, dan mereka menetapkan harga tertentu. Dan ini adalah permintaan untuk 16 ons. Sekarang, berapa permintaan untuk 16 ons berikutnya, oke? Ya, ini tidak akan berhasil.
Kita harus memiliki kurva penawaran yang miring ke atas. Maaf tentang itu. Kita mempunyai kurva penawaran yang sedikit miring ke atas, oke?
Now we have the demand for the next-- so here's your price. Here's your $1.22, OK?
Now, you say, "Well, what's my demand when I sell 32 ounces?"
Well, it turns out demand doesn't shift out twice as much. It just shifts out a little bit more. So you can only charge $1.72 for the next 16 ounces.
Probably, if you want to go to the big-- if you go to 7-Eleven, where you can get sizes up to, you know, as big as your house, OK-- they keep these curves keep getting closer and closer to each other. So those price increments get smaller and smaller.
And that's why you can get the monster, you know, ginormous Gulp at 7-Eleven-- is really just not that different from the price of getting the small little mini size, OK, because of diminishing marginal utility. All right, and so that's how the market-- that's essentially how we can take this abstract concept, this sort of crazy math, and turn it into literally what you see in the store you walk into, OK? Questions about that? Yeah.
Sekarang kami memiliki permintaan untuk produk berikutnya-- jadi inilah harganya. Ini $1,22, oke?
Sekarang, kau berkata,
"Apa permintaanku ketika aku menjual 32 ons?"
Ternyata permintaan tidak berubah dua kali lipat. Itu hanya bergeser sedikit lagi. Jadi kau hanya dapat mengenakan biaya $1,72 untuk 16 ons berikutnya.
Mungkin, jika kau ingin pergi ke tempat yang besar-- jika kau pergi ke 7-Eleven, di mana kau bisa mendapatkan ukuran hingga, kau tahu, sebesar rumahmu. oke--
Mereka menjaga kurva ini semakin mendekati satu sama lain. Jadi kenaikan harga tersebut semakin kecil. Dan itulah mengapa kau bisa mendapatkan monsternya, lho, Gulp yang sangat besar di 7-Eleven-- sebenarnya tidak jauh berbeda dengan harga untuk mendapatkan ukuran mini kecil, oke, karena utilitas marjinalnya semakin berkurang.
Baiklah, jadi begitulah pasarnya-- pada dasarnya itulah cara kita mengambil konsep abstrak ini, matematika gila semacam ini, dan mengubahnya menjadi apa yang kau lihat di toko yang kau datangi, oke?
Ada pertanyaan tentang itu?
Ya.
AUDIENCE: So how does this [? place ?] [INAUDIBLE], like if for example, you wanted to buy a snack that you were going to have for breakfast every day--
JONATHAN GRUBER: Awesome. Awesome question.
AUDIENCE: And then every single day, it was going to be your first granola bar, right? So I think that it's going to diminish every single time, but it's still cheaper to buy in bulk than it would be to buy a single granola bar every single time.
JONATHAN GRUBER: Great, great question. Yeah?
MAHASISWA: Jadi, bagaimana hal ini [? tempat ?] [Tak terdengar], seperti misalnya, anda ingin membeli makanan ringan yang akan anda makan di setiap pagi.
JONATHAN GRUBER: Luar biasa. Pertanyaan yang luar biasa.
MAHASISWA: Dan setiap hari, itu akan menjadi granola bar pertama anda, bukan? Jadi menurutku jumlahnya akan berkurang setiap saat, tetapi masih lebih murah untuk membeli dalam jumlah besar daripada membeli satu batang granola setiap saat.
JONATHAN GRUBER: Pertanyaan yang bagus dan bagus. Ya?
AUDIENCE: I think that has more to do with packaging cost than marginal utility.
JONATHAN GRUBER: Well, I mean, the risk of my going to this model is, once we get nonlinear, the order we do things in this class, we have to start talking about supply factors I want to talk to.
But there's two answers. One is packaging efficiencies. But the other is, if you actually go to Costco and look at their prices, for many things, they're not actually better than the supermarket.
So actually, the price of buying the giant like, 8,000 bars of granola is actually not that much more-- not that much less than 1,000 time buying eight granola bars. It's less, but it's not nearly as much less of these examples as sodas in McDonald's, which is exactly your point.
Utility diminishes less, so they don't want to charge as much less for multiple packages. So you can actually-- if you compare the gap in perishable product pricing by size, it's much larger than the gap in nonperishable pricing by size. Great point, Yeah...
PENONTON: Kupikir itu lebih berkaitan dengan biaya pengemasan daripada utilitas marjinal.
JONATHAN GRUBER: Yah, maksudku, risiko, aku pergi ke model ini adalah, begitu kita menjadi nonlinier, urutan kita melakukan hal-hal di kelas ini, kita harus mulai berbicara tentang faktor pasokan yang ingin kuajak bicara.
Tapi ada dua jawaban. Salah satunya adalah efisiensi pengemasan. Tetapi yang lainnya adalah, jika kau benar-benar pergi ke Costco dan melihat harga mereka, untuk banyak hal, mereka sebenarnya tidak lebih baik daripada supermarket.
Jadi sebenarnya, harga dari membeli seperti, 8.000 batang granola sebenarnya tidak jauh lebih-- tidak kurang dari 1.000 kali membeli delapan batang granola. Ini kurang, tetapi hampir tidak kurang dari contoh-contoh ini seperti soda di McDonald's, yang persis poinmu. Utilitas berkurang lebih sedikit, jadi mereka tidak ingin mengenakan biaya lebih sedikit untuk beberapa paket. Jadi kau sebenarnya dapat-- jika membandingkan kesenjangan dalam harga produk yang mudah rusak berdasarkan ukuran, itu jauh lebih besar daripada kesenjangan dalam harga yang tidak mudah rusak berdasarkan ukuran. Poin yang bagus. Ya.
AUDIENCE:
Is there also just like a different time frame to which the utility starts diminishing for every product? Because you gave the example of soda, but it's like, would that reset later in the day, if we wanted-- were thirsty again, or--
Apakah ada juga kerangka waktu yang berbeda di mana utilitas mulai berkurang untuk setiap produk? Karena kau memberi contoh soda, tetapi seperti, apakah itu akan diatur ulang di kemudian hari, jika kita ingin-- haus lagi, atau--
JONATHAN GRUBER:
Awesome, and that is why they don't let you walk back in with the same cup and refill it, right? That's exactly right, and that comes to this point. It's sort of like it's nonperishable as you get longer apart. But you know, it's all just really interesting. So at Fenway, OK, you can get-- you get like a regular sized soda, it's like crazy. It's like $6. Then for like $8, you get a big soda. Then for $10, you get a refillable big soda, OK?
Luar biasa, dan itulah mengapa mereka tidak membiarkanmu masuk kembali dengan cangkir yang sama dan mengisinya kembali, bukan? Itu benar, dan itu sampai pada titik ini. Ini seperti tidak mudah rusak saat semakin lama terpisah. Tapi tahukah kamu, itu semua hanya benar-benar menarik.
Jadi di Fenway, OK, Anda bisa mendapatkan-- kau mendapatkan seperti soda berukuran biasa, itu seperti orang gila. Ini seperti $6. Kemudian untuk seperti $8, Anda mendapatkan soda besar. Kemudian untuk $10, Anda mendapatkan soda besar yang dapat diisi ulang, oke?
Now, the question is, can you bring that refillable soda back to additional games?
Technically not, but I do.
And basically they sort of understand-- so this interesting question of sort of the perishability of things and how that's going to affect things going on. It's a really-- it's an interesting question. Other comments? OK, I'm going to stop there. Those are great comments. Thanks everyone for participating. And we will come back next time and talk about the sad reality that we haven't won the lottery, and we have limited amounts of money.
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