Common functions in economics, what is an economic function?

That is, the consumption function.

The consumption function is a statement about the relationship between consumption and income. It was first proposed by J. Keynes in his book "The General Theory of Employment, Interest and Money" in 1936, that is, there is a fairly stable relationship between disposable income and consumption, and this relationship can be expressed as a function, called the consumption function.

Keynes believed that the factors that affect people's consumption can be divided into two main categories: subjective factors; Objective factors. Subjective factors include the psychological characteristics of human nature, social customs and social institutions, and the latter two will not change significantly in a short period of time.

Objective factors, including changes in interest rates and fiscal policy, will not change much in the short term.

As a result, Keynes concluded that the consumption function is a relatively stable function. Its shape depends on the total income and the basic psychological laws of the person. The basic psychological laws of human nature determine:

When income increases, people will consume more, but consumption will not increase as fast as income. This is the law of diminishing marginal propensity to consume.

Thus, it is roughly conceivable that Keynes's consumption function graph is that consumption increases and decreases with income and employment in an economic cycle, but its volatility is smaller than that of the latter two.

Economics is a discipline that studies the various economic activities and corresponding economic relations of human society at various stages of development, as well as the laws of operation and developmentThe core ideas of economics are material scarcity and efficient use of resources, which can be divided into two main branches, microeconomics and macroeconomics.

Economics originated from the early economics represented by Xenophon and Aristotle in Greece, and through the development of economists such as Adam Smith, Marx, and Keynes, economics derived from interdisciplinary disciplines such as evolutionary science and behavioral economicsWith the rapid development of the national economy, the research and application of economics have attracted more and more attention from the state and the people, and the theoretical system and application have been continuously improved and developed.

Section 6: Common Functions in Economics.

1. Demand functionIf ** is the most important factor in determining the amount of demand, it can be considered that q is a function of p, and q can be considered a function of p. The meaning of the record as demand: the need for a consumer to have purchasing power for a certain good in a specific period of time and under certain conditions) (PFQ then f is called the demand function. , bpaq linear demand function: common demand function: 2cpbpaq quadratic curve demand function:

0, babpaeq exponential demand function: ( where a, b, c, a > 0 ) power function: 0, 0, kakpqa where example 1 lets the demand function of a commodity be ) 0, ( when ** and discuss qp solution, 0bqp when it represents the demand when ** is zero is b, which is called saturated demand; bpq, 0a it means **, when ab no one wants to buy this product.

2. The supply functionIf ** is the most important factor in determining the quantity of supply, the meaning of supply: At a certain time, under certain conditions, the commodity that the producer is willing and able to sell can be considered as a function of p q. denoted as) (pgq then f is called the supply function.

In general, the supply function can be replaced by the following simple function approximation: linear function: 0,, babapq where the power function is the power function:

a, where the exponential function: 0, 0 kakpqa where 0, 0, baaeqbp where make the demand curve d and the supply curve s in the same coordinate system, the intersection of the two curves is called the supply and demand equilibrium point, and the abscissa of the point is called the supply and demand equilibrium**Supply and demand balance pointSupply and demand balance point E0 p0q supply and demand balance**.

3. The production function depicts the relationship between the input of each factor of production and the maximum possible output of the product in a certain period. Generally speaking, factors of production include a variety of factors such as capital and labor, and for the sake of convenience, labor and other factorsFor the sake of convenience, let's consider for the moment a case where there is only one input variable and all the other inputs are constants

Example 2)(22)2 (g)()xgcxxcxxgxgxaaa Since the functional relationship between the two is set with the output, it can be seen that when the reward of 1 a scale is unchanged; At all times, when 11 if the input is doubled, the output is doubled, and the output is doubled, and the output is less than doubled, that is, the return to scale is diminishing; , when 1 a If the input is doubled, the output more than doubles, i.e., the return to scale increases

Fourth, the cost function cost is the total amount of various production factors required to produce a certain number of products, which is composed of two parts: fixed cost and variable cost. ccSolidsAggregateccccVariable Payments for Fixed Factors of ProductionPayments for Variable Factors of ProductionVariable CostsVariable CostsFixed Costs.