Externalities

TOPIC:            Externalities

DATE:            TO BE ANNOUNCED

TEXT REFERENCES:    Mankiw, Chapter 10.

1.    External benefits

    A.    Definition

    B.    Why laissez faire market provides "too little" of the good

2.    External costs

    A.    Definition

    B.    Why laissez faire market provides "too much" of the good

3.    Internalizing externalities

Imperfect Competition: Monopolistic Competition

TOPIC:            Imperfect Competition: Monopolistic Competition

TEXT REFERENCES:    Mankiw, Chapter 16

DATE:            TO BE ANNOUNCED

1.     General characteristics of monopolistic competition

        A.     Easy entry into industry and its similarity to perfect competition

        B.     Product differentiation and its similarity to monopoly

2.     Short run and long run behavior and "sick" industries

International Trade

TOPIC:             International Trade

DATE:             TO BE ANNOUNCED

TEXT REFERENCES:     Mankiw, Chapter 3

1.     Absolute advantage

2.     Comparative advantage and how countries benefit from free trade

Imperfect Competition: Oligopoly

TOPIC:             Imperfect Competition: Oligopoly

DATE:              TO BE ANNOUNCED

TEXT REFERENCES:     Mankiw, Chapter 17

1.     Definition of imperfect competition and the spectrum of market structures

2.     Oligopoly

    A.     Definition

    B.     Interdependency and examples (cartels, price leadership)

    C.     Galbraith's theory of the large corporation and the dependence effect

Monopoly

TOPIC:             Monopoly

DATE:            TO BE ANNOUNCED.

TEXT REFERENCES:     Mankiw, Chapter 15

1.     The definition of monopoly and the requirements to be a "pure monopoly"

2.     Common barriers to entry and the reason for a natural monopoly

3.     The monopoly model in the short run

    A.     The downward sloping average revenue (demand) and marginal revenue curve of the monopoly firm

    B.     The possibilities of profits or losses to the monopoly firm in the short run

4.     The possibilities of profits or losses in the long run

5.    The efficiency implications of competition and monopoly

    A.    Technological efficiency

    B.    Allocative efficiency

6.     The regulation of the natural monopoly

Perfect Competition

TOPIC:            Perfect Competition

DATE:            TO BE ANNOUNCED

TEXT REFERENCES:    Mankiw, Chapter 14

1.    Assumptions of perfect competition   

2.    The short run model that shows the possibilities of profit or loss to the perfectly competitive firm

3.    The long run in perfect competition

    A.    Why there are no economic profits

    B.    The implications of an increase in demand for both the short run and the long run

Cost Theory and Profit Maximization

TOPIC:            Cost Theory and Profit Maximization

DATE:            TO BE ANNOUNCED

TEXT REFERENCES:    Mankiw, Chapter 13   

1.    Implicit vs. explicit cost   

2.    Normal vs. economic profit vs. economic loss

3.    The short run

    A.    Definition   

    B.    The product curves (total physical product and marginal physical product/ increasing and diminishing returns)

    C.    The cost curves (marginal, total, variable etc.)

4.    The long run

    A.    Definition

    B.    The long run average cost curve (including economies vs. diseconomies of scale)

5.    Profit maximization/loss minimization rule MC=MR and why true

6.    Application of cost theory: the decision to commute by automobile or mass transit