ECN 221 S14 Syllabus

Total law of diminishing marginal u the utility

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Unformatted text preview: lity maximizing rule for consumption of 2 or more goods (the “equimarginal principle” ) “consumer equilibrium” benefit (marginal vs. total ) net benefit and consumer surplus the net-benefit maximizing rule for consumption of a single good the income effect (IE) of a price change the substitution effect (SE) of a price change application of IE and SE to wage changes (the “backward bending” labor supply curve) Unit 6: Perfect competition, production and profit assumptions for a perfectly competitive (PC) market (implications for behavior of PC firms) The demand curve facing a PC firm and “price-taking” behavior Costs (fixed, variable, marginal) explicit costs and implicit costs profit (economic vs. accounting) “normal” profit fixed vs. variable inputs law of (and point of) diminishing marginal returns production curves (total, marginal, average) equimarginal principle for capital and labor decisions Unit 7: Costs costs (fixed, variable, total, averages) shapes of unit cost curves in the short-run economies of scale and long-run costs curves (IRTS, CRTS, DRTS) Unit 8: Profit Maximization and long run market dynamics profit maximization by a PC firm the shut down decision (short-run) the long-run decision of whether or not to stay in the market the PC firm’s short-run supply curve long run competitive equilibrium (LRCE) getting there price implications of profitability implications of efficiency implications of Unit 9: Monopoly model of monopoly assumptions implications barriers to entry natural monopoly monopoly power profit max by a monopolist efficiency of PC vs. monopoly Unit 10: Imperfect Competition monopolistic competition (MC) model - assumptions - implications LR equilibrium and monopolistic competition - getting there - efficiency of (firm vs. market) profit max by MC and Oligopoly oligopoly models - The kinked demand curve model - cartels and collusion - price leadership...
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