MICROECONOMICS

CHAPTER 5:
THE THEORY OF CONSUMER CHOICE
 Problem
A consumer has an income of 2,000,000 VND per month allocated to two
goods: food and entertainment, the price of food is P(F)= 15,000 VND/unit,
the price of entertainment is P(M) = 10,000 VND/unit. Assume that the
consumer has utility function: TU= 2(F^(1/3))*(M^(2/3)) (F: the amount of
food; M: the amount of entertainment). Find M and F to maximize utility?

Solution
• Utility (U): Lợi ích
• Total Utility (TU): Tổng lợi ích
• Marginal Utility (MU): Lợi ích cận biên
• Principle of Diminishing Marginal Utility: Quy luật lợi ích cận biên giảm dần
• Condition for maximizing utility: Tìm điều kiện để tối đa hóa lợi ích
 Condition for maximizing utility
Tìm điều kiện để tối đa hóa lợi ích

• Bài toán tối ưu

- Hàm mục tiêu:
• Hàm lợi ích đạt max
VD: TU= 2(F^(1/3))*(M^(2/3)) max (tháng)
(F và M là lượng 2 hàng hóa)
- Ràng buộc bởi thu nhập tiêu dùng (I) dùng hết cho 2 hàng
hóa F và M giá tương ứng: PF và PM
• Phương trình đường ngân sách: I = PF*F + PM*M
 Condition for maximizing utility
Tìm điều kiện để tối đa hóa lợi ích
- Cách (1): sử dụng nhân tử giả Lagrange (SGK: Lê Thế Giới)
- Cách (2): sử dụng đường đồng ích (U); & đường ngân sách (I)
(SGK: Lê Thế Giới)
- Cách (3): Sử dụng phân tích cận biên
 Theory of Utility (Lý thuyết lợi ích)
• Utility
  (U)
the satisfaction or pleasure that a consumer gets from the consumption of a
good or service
• Total utility (TU)
the total satisfaction or pleasure that a consumer gets from the consumption of
goods and services
• Marginal Utility (MU)
measures additional satisfaction obtained from consuming 1 additional unit of
goods or services.
the change in total utility due to a one-unit increase in the quantity of a good or
service.
MU = Q
 Principle of Diminishing Marginal Utility
Quy luật lợi ích cận biên giảm dần

Marginal utility is diminishing

as consumption increases.

Principle of Diminishing Marginal Utility:

The marginal utility of a good or service decreases as the quantity of the good
increases, ceteris paribus. In other words, total utility increases more and more
slowly as the quantity consumed increases.
HD: Tìm ĐK tối đa hóa lợi ích = tiếp cận 2
 Indifference Curve
(đường đồng ích/đường đẳng ích/đường bàng quan)
QY
• Shows consumption bundles that
give the consumer the same level
of satisfaction
B
• Combinations of goods on the
same curve A
- Same satisfaction U0

Đường đồng ích là một đường biểu

thị các kết hợp tiêu dùng hàng hóa QX
đem lại cùng mức lợi ích
 Four Properties of Indifference Curves
1. Higher indifference
curves are preferred to QY
lower ones.
– Higher indifference curves
– more goods
C
Consumer prefers every D
A U1
bundle on U1 (like C)
to every bundle on U0 (like A). U0
U2
Consumer prefers every
bundle on U0 (like A) QX

to every bundle on U2 (like D).

 Four Properties of Indifference Curves

2. Indifference curves are

downward-sloping. QY

If the quantity of X is reduced, B

the quantity of Y must be
increased to keep consumer A
equally happy. U0

QX
 Four Properties of Indifference Curves

3. Indifference curves
QY
cannot cross.
Suppose they did.
Consumer should prefer
B to C, since B has B
more of both goods.
Yet, consumer is equally satisfied C A
at points B and C: U0 U3
Consumer likes C as much as
A (both are on U3).
Consumer likes A as much as QX
B (both are on U0).
 Four Properties of Indifference Curves

4. Indifference curves
QY
are bowed inward.
A
Consumer is willing to
give up more units of 6
Y for an unit of X if he 1
has few X (A) than if B
he has many (B). 2
1 U0

QX
 Slope of Indifference Curve
Marginal Rate of
MRS = slope of
Substitution (MRS – Tỷ lệ thay thế biên):
indifference curve
the rate at which a consumer QY
= - Muxx/MUYY
is willing to trade one good for another. A

MRS is the amount of Y MRS = 6

consumer would substitute
1
for another X.
B
MRS = 2
MRS falls as you move down 1 I1
along an indifference curve.
QX
HD: Tìm ĐK tối đa hóa lợi ích = tiếp cận 2
 Budget Constraint

• Budget constraint: shows the possible combinations of different

goods that consumer can buy given her income and the prices of the
goods.
• I = PX.X + PY.Y
• Draw the budget line:
+ Vertical intercept =
+ Horizontal intercept =
• Slope of budget line:
 Budget Line
PX, PY = const, I changes
I decreases:
I increases:
 Budget Line
I, PY = const, PX changes
PX decreases:
PX increases:
 Budget Line
I, PX = const, PY changes
PY decreases:
PY increases:
HD: Tìm ĐK tối đa hóa lợi ích = tiếp cận 2
 Optimization (Utility maximization)
• F is consumer’s optimum:
- Point where indifference curve is tangent to the budget constraint
- Best combination of goods available to the consumer
- Slope of indifference curve
• Equals slope of budget constraint

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Kết luận: Điều kiện để tối đa hóa lợi ích khi lựa
chọn tiêu dùng (cân bằng tiêu dùng)