【正文】 ded by all buyers in the market is 40 slices. Benefit, Cost, and Surplus 169。 2020 Pearson AddisonWesley Lisa and Nick are the only buyers in the market for pizza. At $1 a slice, the quantity demanded by Lisa is 30 slices. Benefit, Cost, and Surplus 169。 2020 Pearson AddisonWesley Benefit, Cost, and Surplus Demand, Willingness to Pay, and Value Value is what we get, price is what we pay. The value of one more unit of a good or service is its marginal benefit. We measure value as the maximum price that a person is willing to pay. But willingness to pay determines demand. A demand curve is a marginal benefit curve. 169。 2020 Pearson AddisonWesley Personal Characteristics Personal characteristics allocate resources to those with the ―right‖ characteristics. For example, people choose marriage partners on the basis of personal characteristics. But this method gets used in unacceptable ways: allocating the best jobs to white males and discriminating against minorities and women. Resource Allocation Methods 169。 2020 Pearson AddisonWesley FirstCome, FirstServed A firste, firstserved allocates resources to those who are first in line. Casual restaurants use firste, first served to allocate tables. Supermarkets also uses firste, firstserved at checkout. Firste, firstserved works best when scarce resources can serve just one person at a time in a sequence. Resource Allocation Methods 169。 2020 Pearson AddisonWesley Majority Rule Majority rule allocates resources in the way the majority of voters choose. Societies use majority rule for some of their biggest decisions. For example, tax rates that allocate resources between private and public use and tax dollars between peting uses such as defense and health care. Majority rule works well when the decision affects lots of people and selfinterest must be suppressed to use resources efficiently. Resource Allocation Methods 169。 2020 Pearson AddisonWesley Market Price When a market allocates a scarce resource, the people who get the resource are those who are willing to pay the market price. Most of the scarce resources that you supply get allocated by market price. You sell your labor services in a market, and you buy most of what you consume in markets. For most goods and services, the market turns out to do a good job. Resource Allocation Methods 169。 2020 Pearson AddisonWesley Every time you order a pizza or buy a Valentine’s Day rose, you express your view about how scarce resources should be used. You make choices in your selfinterest. Markets coordinate your choices along with those of everyone else. But do markets do a good job? Do they enable our selfinterest choices to be in the social interest? Do markets produce a fair oute? 169。5 EFFICIENCY AND EQUITY 169。 2020 Pearson AddisonWesley 169。 2020 Pearson AddisonWesley Resource Allocation Methods Scare resources might be allocated by ? Market price ? Command ? Majority rule ? Contest ? Firste, firstserved ? Sharing equally ? Lottery ? Personal characteristics ? Force How does each method work? 169。 2020 Pearson AddisonWesley Command Command system allocates resources by the order (mand) of someone in authority. For example, if you have a job, most likely someone tells you what to do. Your labor time is allocated to specific tasks by mand. A mand system works well in anizations with clear lines of authority but badly in an entire economy. Resource Allocation Methods 169。 2020 Pearson AddisonWesley Contest A contest allocates resources to a winner (or group of winners). The most obvious contests are sporting events but they occur in other arenas: For example, The Oscars are a type of contest. Contest works well when the efforts of the ―players‖ are hard to monitor and reward directly. Resource Allocation Methods 169。 2020 Pearson AddisonWesley Lottery Lotteries allocate resources to those with the winning number, draw the lucky cards, or e up lucky on some other gaming system. State lotteries and casinos reallocate millions of dollars worth of goods and services each year. But lotteries are more widespread. For example, they are used to allocate landing slots at some airports. Lotteries work well when there is no effective way to distinguish among potential users of a scarce resource. Resource Allocation Methods 169。 2020 Pearson AddisonWesley Force Force plays a role in allocating resources. For example, war has played an enormous role historically in allocating resources. Theft, taking property of others without their consent, also plays a large role. But force provides an effective way of allocating resources—for the state to transfer wealth from the rich to the poor and establish the legal framework in which voluntary exchange can take place in markets. Resource Allocation Methods 169。 2020 Pearson AddisonWesley Individual Demand and Market Demand The relationship between the price of a good and the quantity demanded by one person is called individual demand. The relationship between the price of a good and the quantity demanded by all buyers in the market is called market demand. Figure on the next slide shows the connection between individual demand and market demand. Benefit, Cost, and Surplus 169。 2020 Pearson AddisonWesley Lisa and Nick are the only buyers in the market for pizza. At $1 a slice, the quantity demanded by Nick is 10 slices. Benefit, Cost, and Surplus 169。 2020 Pearson AddisonWesley The market demand curve is the horizontal sum of the individual demand curves. Benefit, Cost, and Surplus 169。 2020 Pearson AddisonWesley Lisa and Nick pay the market price, which is $1 a slice. The value Lisa places on the 10th slice is $2. Lisa’s consumer surplus from the 10th slice is the value min