Final Review

Final Review - FinalReview:Econ11 Production 00:09...

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Final Review: Econ 11 00:09 Production Market Failure Market Mechanisms o Use of market prices and sales to signal desired outputs (or resource  allocations) Production Possibilities Frontier o Points of efficient allocation of goods in the economy – one of which is  pareto optimal Market Failure o An imperfection in the market that prevents optimal outcomes Public goods Private goods A good or service whose consumption by one person excludes  consumption by others Public good A good or service whose consumption by one person does not  exclude consumption by others Ex. Public Tv, Flood Control Externalities Costs (or benefits) of a market activity bore by a third party.  Difference between social and private costs Can happen either on demand or supply side Ex. Cigarettes, pollution, education, vaccines Market power Ability to alter the price of a good or service Monopoly A firm that controls the entire market supply
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This note was uploaded on 04/20/2011 for the course ECON 11 taught by Professor Abob during the Spring '11 term at UC Irvine.

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Final Review - FinalReview:Econ11 Production 00:09...

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