Market Failures - part 2

Topics and Times

Monopoly Graph Review - :17
Government and Antitrust Laws - 1:20
Unfair Distribution of Wealth intro - 4:03
The Lorenz Curve - 5:40
Taxes intro - 8:53
Taxes and their purpose - 9:12
Three types of taxes - 9:57
The Laffer Curve - 13:05

Monopsony and Least Cost - Tuesdays Class

  

Subjects and times are listed below.

Least Cost Rule - :31
Least Cost Rule on a FRQ - 1:54
Profit Maximizing Rule for combining resources - 4:31
Characteristics of Monopsony - 5:56
Determining MFC for Monopsony - 9:13
Graphing Monopsony - 11:36

MRP=MRC

Perfectly competitive labor market video from class.  Please let me know if you have any questions.
Topics and times listed below.
Factor Markets in the Circular Flow Model - :45

Characteristics of a Perfectly Competitive labor market – 4:00

Graphing the market for labor – 6:41

Derived demand defined – 7:44

Marginal Factor Cost defined – 9:53

Marginal Revenue Product defined – 11:42

MRP = MFC – 14:13

Graphing the perfectly competitive labor market and firm – 14:54

Demand for labor defined – 16.29

Determining Wage – 18:29

Practice – 19:50

Answers – 21:30

Christmas Ideas

Please don't forget our favorite product for your loved ones.  I am predicting a failed monopoly, how about you?

Graphing Oligopolies

Please understand that the MC curve can cross through the space between the two marginal revenue curves.  Simply by following the line straight up to the demand curve, we still get the price.  None of our rules change because we are dealing with a new graph.  Profit maximization still occurs when MR=MC. 

Game Theory

Tax and Subsidy: Per Unit and Lump Sum

This video deals with the affects taxes or subsidies have on the firms in the different market structures.  Addressed here is the use of both per unit and lump sum taxes or subsidies with a few examples.  At home, please practice a per unit and lump sum tax and subsidy on each market structure (perfect competition, monopolistic competition, monopoly, and oligopoly).

Monopolistic Cometition

This video discusses the Monopolistic Competition model in the short-run and in long-run equilibrium.  In addition excess capacity and dead weight loss is discussed in the context of efficiency. 
The Monopolistic Competition model is relatively difficult to draw so make sure you practice at home.

Shutdown and Long Run Equilibrium

Short-Run Cost Curves

Tax and Elasticity

In determining who shares the burden of taxation, we have to take into account elasticity.  If the demand curve is elastic, the producer will share more of the tax burden; a perfectly elastic demand curve will require the producer to take 100% of the burden.  If the demand curve is inelastic, the consumers will share more of the tax burden; a perfectly inelastic demand curve will result in the consumer taking100% of the tax burden.  The same is also true for the supply curves. 

Price, Income, and Cross Price Elasticity of Demand

Price Elasticity of Demand = Percentage change in quantity demanded / Percentage change in price

• Ignore the sign
• If the number is less than one, the good is inelastic
• If the number is more than one, the good is elastic
• If the number is equal to one, the good is unit elastic

Price Elasticity of Supply = Percentage change in quantity supplied / Percentage change in price

Income Elasticity of Supply = Percentage change in quantity demanded / Percentage change in income

• If the sign is +, it is a normal good
• If the sign is -, it is a inferior good

Cross Price Elasticity of Demand = Percentage change in quantity demanded for product A / Percentage change in price of product B

• If the sign is +, it is a substitute
• If the sign is -, it is a complement

Elasticity

Consumer and Producer Surplus with Dead Weight Loss

Market Equilibrium and Disequilibrium

Prof. Ben Powell Explores Myths About Immigration

This is mainly a Macro issue more than it is Micro; however, Prof. Powell provides a very interesting take on the issue of immigration.  What do you think?
Isn't economics fun.

Steve Horwitz on the Rich and Poor

Dr. Horwitz provides a different take on what is commonly heard.  What are your thoughts?

Harvard Professor, John Miron on Capitalism

Just some food for thought as we begin our journey through competitive markets.

Comparative Advantage Using Inputs

This is another comparative advantage video, but this one deals with inputs (labor) instead of just outputs.

Comparative and Absolute Advantage

Introduction