PUP-4203 Lecture Notes - Lecture 4: Information Asymmetry, Market Power, Wage Labour
Document Summary
Concepts: law of supply, law of demand, market eiciency, market failure, coase, pigou, transacion costs. Environmental economics is focused on environmental problems (polluion) There is a posiive relaionship between the price of the good and the amount (quanity) that producers are willing to provide. If the cost of producion, or the wage labor is more expensive, you won"t be willing to supply as much. The slope of this line, is the cost the irm faces. When the price is high, consumers don"t want as much. This price gets decided by nobody but the free market, adam smith the wealth of naions. The equilibrium is not necessarily equitable, it depends on what you value. When markets are funcioning well, they are eicient. Market eiciency: the maximum total beneit can be achieved. Markets are eicient if they are funcioning well. An instance that we have ideniied where markets don"t meet an equilibrium that supplies maximum beneit.
