ECON 1100 1nd Edition Lecture 30 Outline of Last Lecture I. Lysine CartelOutline of Current Lecture I.ScheduleII.ExamIII.GradingIV.ExternalitiesCurrent LectureI. ScheduleThis week: externalities, public good (externalities on steroids), & social choice (voting)Next week: distribution of income and wealth, povertyII. ExamFinal: 7:30 A.M. on Thursday 2 hour time slot45 min. Final 25 MC QsCumulative: most important ideasSupply & demandOpportunity costEquilibriumEfficiency These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.Marginal analysis1 hr. 4th MidtermDon’t have to takeThought process to decide:Can you use the time better in studying for something else?Will you improve your grade?Study Top 10 lists2-3 biggest ideas on eachLook at the list of key ideas (will be posted) & understandKey is to understand… NOT memorize!III. GradingTake each TA’s top 3 students and average the threeEx. Jake has 2 sections, 60 students; top 3 students averaged to get score what other 67 students will be scored out ofEach student graded against students in TAs sectionParticipationLast opportunity in next 2 weeks (10 pts)IV. Externalities Under certain conditions, market equilibrium is efficientMonopoly screws stuff upExternality exists when 1 person/group’s choice/action causes uncompensated costs or benefits to othersAlso called spillover or neighborhood effectsPrice conveys how much is involved in making productCompensated: worker gets paid for jobExternalities can have costs & benefitsAssume:Product w/o external benefitsMB consumer = MB societyMPB = MSBFor efficiency: MSB =
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