ECON 1101 Lecture Notes - Lecture 8: Coase Theorem, Marginal Revenue, Demand Curve
12 Feb 2018
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Final exam review plan: multiple choice questions will cover all topics, long answer questions will cover chapters 13, 14 and 15. Income elasticity of demand; normal, inferior, necessity and luxury goods: cross-price elasticity of demand; substitutes vs. complements, price elasticity of supply, perfectly elastic, elastic, inelastic, perfectly inelastic supply curves. Chapter 7- efficiency: consumer surplus, producer surplus, total surplus, efficiency. Chapter 6- supply, demand and government policies: price controls: price floors (minimum wage), price ceilings (rent controls, binding vs. non binding price controls, surpluses and shortages, efficiency analysis of price controls: cs, ps, ts, dwl. Chapter 10- externalities - concepts only, no calculations: positive vs negative externalities, examples of externalities. Socially optimal outcome: why is the market outcome inefficient, dwl resulting from the market outcome and what it represents, government solution to externalities: taxes, regulation, tradable permits (for pollution only, private solutions to externalities; coase theorem. Chapter 13- production costs- concepts, tables, graphs, calculations.
