Econ 102: Economics and Government Policy
Topics to be covered
1. Fundamental Concepts/Terms
a. Opportunity costs/Tradeoffs
i. OC as a way of quantifying tradeoffs
1. What’s gained/lost
2. Regression analysis of grades and hrs studied
3. Why more students during a recessopn?
a. OC of time
b. Illustrating the concept
i. PPFs
1. Hours studied/exams/friends – time costs
ii. Utility curves budget constraints
c. WSJ article on economists
d. Marginal Analysis
i. Difference between totals, averages and marginal (incremental)
ii. Marginal benefits versus marginal costs
iii. Value of life paper?
2. Basic Demand and Supply Theory
a. Individual and market demand
b. Individual firm and market supply
c. Consumer and Producer Surplus
i. Deadweight loss and economic efficiency
d. Impact of Taxes and Subsidies
i. Efficiency loss
ii. Tax paper
e. Price Supports/Controls
i. Milk support paper
ii. WIN or price controls/rationing during WWII
3. Market Structure
a. Competitive Market
b. Monopoly
c. Oligopoly
d. Monopolistic Competition
4. Regulating Imperfect Markets
a. Monopolies
i. Sherman Antitrust Act, Clayton and Putman
1. Beyond simple single price discrimination
a. Type I – Type III, Tie-Ins
2. Merger Activity
a. Horizontal, Vertical, Unrelated
b. Bush/Obama Antitrust
b. Natural Monopolies
i. Argument for regulation
1. US approach
2. French approach
ii. Price Caps
c. Deregulation
i. ENRON and energy markets
ii. FAA and airlines
iii. FCC and Telecomm
d. Natural Resource Markets
i. Fisheries
1. Quotas, ITQ’s
ii. Pollution
1. Standards, Taxes, Tradable Permits
e. Financial Markets
i. Assymetric Information
ii. Principal/Agent Problem
iii. Behavioral Economics