Econ 0100 Introduction to Microeconomic Theory Fall 2016 Midterm 2 Chapters 6 10 11 12 and 13 are covered on the second midterm Concepts Price ceilings and price floors Shortages and Surpluses Black Markets Taxes tax incidence and efficiency implications The relationship between elasticity and tax incidence Production quotas and subsidies Accounting vs economic profit Perfect competition monopolistic competition oligopoly and monopoly Production efficiency vs allocative efficiency Transactions costs Economies of scale and economies of scope Short run vs long run Total product average product marginal product Diminishing marginal returns Costs Calculation graphing of TC TVC TFC ATC AVC AFC MC The relationship between the cost curves Long run average cost curve LRAC Minimum efficient scale Marginal revenue Price takers The firm s short run and long run output decisions Shutdown point Short run supply curve Profits and losses in the short run Long run equilibrium in a perfectly competitive market Natural monopoly Single priced monopoly Price discrimination Two ways of price discriminating Perfect price discrimination Rent seeking Monopoly regulation Efficient regulation of a natural monopoly Second best regulation of a monopoly 1 Models Algebraic supply and demand Price ceilings and floors Taxation Monopoly Cost curves Competitive firm s output choice Perfect competition Graphical long run short run analysis Monopoly Graphical analysis 2
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