ECON 306- Midterm Exam Guide - Comprehensive Notes for the exam ( 14 pages long!)

• School: University of Maryland
• Department: Economics
• Course: ECON 306
• Professor: Peter Coughlin

Document Summary

Lecture 3 econ305 notes sept 5th, 2017. Rent control: local government imposes a maximum legal price, pmax, we will assume that, pmax < p* (where p* denotes the price in the competitive equilibrium) Comparing different allocation methods it"s useful to ha(cid:448)e a (cid:272)riterio(cid:374) to (cid:272)o(cid:373)pare differe(cid:374)t allo(cid:272)atio(cid:374) (cid:373)ethods: something is pareto efficient if there is no way to make at least one person better off without making someone else worse off. In a market: a pareto inefficient outcome means there remain unrealized mutual gains to trade. Competitive equilibrium: all close apartment renters value them at the market price p* or more, all others value close apartments at less than p, so no mutually beneficial trades remain, so the outcome is pareto efficient. Discriminatory monopoly: assignment of apartments is the same as. Equilibrium in the long run: supply will change. Chapter 2 introduces a microeconomic theory of consumers. Lecture 4 econ306 notes sept 7th, 2017.