ECON 1030 Study Guide - Midterm Guide: Janet Yellen, Monopolistic Competition, Monopoly
1 Feb 2017
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Complete the market system (shock therapy gradualism) Balance the flow of info between buyer and seller (drug selection/moral hazard (buyer or seller has more info advantage adverse than someone else someone"s expense) Prices too low and too much use it to benefit at. Positive: 3rd party benefit (cigs - smoker) Negative: 3rd party cost (cigs - 2nd hand smoke) Failure to impact upon the level (gdp) and/or direction (gdp growth rate) of aggregate market activity. -- in all cases, gov"t is getting bigger. Oligopoly commercial tells it is then each get to decide what they want) how good and bad. Apply public economic policy to impact upon the macroeconomy. Firm objective: max profits from production, measure. = - tc: monopoly, single seller, unique product, significant barriers to entry/exit, set the price as high as possible (along demand curve) Process for how the firm behaves: similar to the process for competitive firms:
