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?

How Should a Monopoly Price? So far a monopoly has been thought of as a firm which has to sell its product at the same price to every customer. This is uniform pricing. Can price-discrimination-(差别定价 ) earn monopoly higher profits?

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

Structure Market equilibrium Quantity tax and equilibrium Tax incidence税收分担) Deadweight loss(额外净损失)

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

Contents Dominant strategy Nash equilibrium Prisoner's' dilemma and repeated games Multiple equilibria and sequential games Pure and mixed strategies

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

Structure Describe preferences Indifference curves(无差异曲线) Well- behaved preferences Marginal rate of substitution(边际替代率)