section3_brian

# section3_brian - 1 Section Notes Week 3 Outline Key...

This preview shows pages 1–2. Sign up to view the full content.

1 Section Notes Week 3 Outline Key Concepts Announcements: Monday OH Coase Theorem Questions on practice problems Transaction Costs Tradable Permits Shadow Price Coase Theorem: Discussion Heterogeneity Overview of Section Today This week’s lectures were pretty intense, as you may have noticed. Up until this week, the class was all about computing and comparing outcomes with an externality. This meant a lot of computational problems, like what I gave you in section notes and practice problems. The major idea? Externalities and how you deal with them. Now he introduced three more huge concepts in economics, three more assumptions of your previous micro-economic courses that we’re deconstructing: (1) property rights and transaction costs, (2) heterogeneity, and (3) full information. Each of these could easily take a full section themselves. For each you need to know the key graph(s), and be able to articulate how they affect policy in an essay question. I cannot possibly cover each adequately today, plus I think many of you are not fully comfortable with the computation stuff from last week. So today I am just going to do a wrap up of externalities and policy, backtracking a bit to clarify notation and go over any problems in detail. Next week I’ll hit on the outstanding topics; David’s promised to take public goods slowly next week. Notation (Acronym) Clarification Social Welfare (SW) =Total Surplus (TS) =CS+PS+TEC+GR Marg. Priv. Benefit (MPB) =Marg. Benefit (MB) =(Inverse) Demand Marg. Priv. Cost (MPC) =Marg. Cost (MC) =Supply Total Ext. Cost (TEC) =Total Env. Cost (TEC) Env. Welfare (EW) = Env. Surplus (ES) =TEB (“Total Ext. Benefit”) - TEC

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

### What students are saying

• As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

Kiran Temple University Fox School of Business ‘17, Course Hero Intern

• I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

Dana University of Pennsylvania ‘17, Course Hero Intern

• The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

Jill Tulane University ‘16, Course Hero Intern