tailieunhanh - Ebook Microeconomics and behavior: Part 2

(BQ) Part 2 book "Microeconomics and behavior" has contents: Production, costs, perfect competition, monopoly, imperfect competition - A game theoretic approach, labor, capital, externalities, property rights, and the coase theorem, government, general equilibrium and market efficiency (online) | fra7573x_ch09_261-296 9/1/07 12:32 AM Page 263 CHAPTER 9 PRODUCTION M any people think of production as a highly structured, often mechanical process whereby raw materials are transformed into finished goods. And without doubt, a great deal of production—like a mason’s laying bricks for the walls of a house—is of roughly this sort. Economists emphasize, however, that production is also a much more general concept, encompassing many activities not ordinarily thought of as such. We define it as any activity that creates present or future utility. Thus, the simple act of telling a joke constitutes production. Woody Allen (Figure ) tells the story of the man who complains to his analyst that his brother thinks he’s a chicken. “Why don’t you tell him he’s not a chicken?” asks the analyst, to which the man responds, “I can’t, I need the eggs.” Once a joke is told, it leaves no more tangible trace than a pleasant memory. But under the economic definition of production, Woody Allen is as much a production worker as the artisan whose chisel and lathe mold an ashwood log into a Louisville Slugger baseball bat. The person who delivers a singing telegram is also engaged in production; so is the doctor who gives my child a tetanus shot; the lawyer who draws up my will; the people who collect my garbage on Wednesday mornings; the postal worker who delivers my tax return to the IRS; and even the economists who write about production. CHAPTER PREVIEW In our discussions of consumer choice during the preceding chapters, an existing menu of goods and services was taken for granted. But where do these goods and services come from? In this chapter we will see that their production involves a decision process very similar to the one we examined in earlier chapters. Whereas our focus in earlier chapters was on the economic decisions that underlie 263 fra7573x_ch09_261-296 264 9/1/07 CHAPTER 9 12:32 AM Page 264 PRODUCTION FIGURE A Production Worker © Associated .