Roadmap 100A - Econ 100A, Economic Analysis - Micro, Fall...

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Econ 100A, Economic Analysis - Micro, Fall 2010 Tuesday, December 7, 2010 Tadeja Gra č ner Roadmap - 100A Market equilibrium (Ch.14) & Long-run vs. short-run equilibrium (Ch.13) - Supply curve is represented by MC curve above the ACmin (SR&LR) - Know firms' (cost) curves and relate them to industry curves (S, D). - U-shaped AC curve b IRS+DRS or/and in the case of output independent FC - Distinguish 3 cases of cost min: 1) output independent FC (license fee), 2) FC coming from fixed input on SR, becoming VC on LR (capital), 3) output independent FC + FC coming from fixed input on SR, becoming VC on LR - Shutting down (SR) vs. Exiting the industry (LR) - Equilibrium price (definition, graph) - Long run supply curve o identical vs. non-identical producers -> graphs 14.5. and 14.6. o upward sloping LR supply curve & identical producers & profit=0 b relate to externalities - Changing conditions and equilibrium b Table 4.1. (shifts in MC, AC) o change in output independent FC (LR AC, converging to SR AC) o change in the price of an input, fixed on the SR, but variable on LR (r increase/decrease) (LR AC, LR MC shift parallel) o change in VC (w increase/decrease) (SR & LR AC, MC shifts) o Change in demand First welfare theorem (Ch.15) - Consumer surplus, producer surplus (market, firm) - Social planner sets SMB=SMC - Pareto efficiency, First welfare theorem – under certain conditions, markets are efficient Government distortion (Ch.18&19) - price elasticity (equation and interpretation), - price floor (gives rise to surplus), - price ceiling (gives rise to shortage, as in rent control) - welfare analysis from graphs o without government intervention o with government intervention s purchase surplus/subsidize shortage
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Roadmap 100A - Econ 100A, Economic Analysis - Micro, Fall...

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