Structure Types of cost curves Fixed, variable and total cost functions Average fixed, average variable and average cost functions Marginal cost functions Marginal and variable cost functions Marginal and average cost functions Short run and long run cost curves

Structure on -collusive- moves Simultaneous moves Quantity competition -Cournot model Price competition- Bertrand model Sequential moves Quantity leadership- Stakelberg model Price leadership Collusion

Structure Definition Consumption externality Production externality The tragedy of commons

Mission of Economists Gary Becker: believe that the main purpose of economics is to understand and help to alleviate poverty\ Who are the poor? How can one help?

Structure What causes monopoly Profit-maximizing- choices of monopoly Markup pricing Taxing monopoly Inefficiency of monopoly Natural monopoly(自然垄断)

Structure Market environments Market demand for a competitive firm Short-run- supply decision Upward sloping MC curve Shut- down condition Long -run- supply decision Comparing long-run- and short--run decisions Producer's' surplus and profits

Structure Economic profit Short-run- profit maximization -Comparative statics Long- run profit maximization Profit maximization and returns to scale Revealed profit maximization

Structure Definition When to provide a public good Efficient provision Private provision: free-riding Variable quantities of public good -Efficient amount Free-riding problem How to provide public goods? Demand revelation

The Theory of Economics does not furnish a body of settled conclusions immediately applicable to policy. It is a method rather than a doctrine. an apparatus of the mind, a technique of thinking which helps its possessor to draw correct conclusions John Maynard Keynes

Information in Competitive Markets In purely competitive markets all agents are fully informed about traded commodities and other aspects of the market. What about markets for medical services, or insurance, or used cars?