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TANSTAAFL: A rather cumbersome and usually hard to remember acronym for the expression "There ain't no such thing as a free lunch. This is a favorite saving of many economists because it highlights, albeit in a grammatically questionable manner, the fundamental problem of scarcity. The phrase serves to emphasize that seemingly "free" lunches are not really free. While they might be free to the customer, someone must pay, that is, incur an opportunity cost of foregone production. The lunch eaten by one person cannot be eaten by another.
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Lesson Contents
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Unit 1: Intro |
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Unit 2: Market Control |
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Unit 3: Perfect Competition |
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Unit 4: Monopsony |
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Unit 5: Bilateral Monopoly | |
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Factor Market Equilibrium
My duties for this lesson are to examine how the two sides of the factor market -- factor demand and factor supply -- come together to form the factor market. Like other markets, we are concerned with equilibrium and competition. The analysis of factor markets has an added bonus. It lets us examine market control from the buying side to balance other analysis of market control from the selling side. The cornerstone phrase capturing this buying-side market control is monopsony. - The first unit of this lesson, The Foundation, begins by reviewing factor demand and factor supply and seeing how they come together to form the factor market.
- In the second unit, Market Control, we see how market control on the selling side of a factor market gives rise to assorted market structures, like monopsony.
- The third unit, Perfect Competition, then takes a look at equilibrium in factor markets that operate under the guidelines of perfect competition.
- In the fourth unit, Monopsony, we extend the analysis to factor markets with control on the buying side, especially monopsony.
- The fifth and final unit, Bilateral Monopoly, then analyzes factor markets with monopoly control on the selling side to counter monopsony control on the buying side.
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MARGINAL COST CURVE A curve that graphically represents the relation between the marginal cost incurred by a firm in the short-run product of a good or service and the quantity of output produced. This curve is constructed to capture the relation between marginal cost and the level of output, holding other variables like technology and resource prices constant. Three related curves are average total cost curve, average variable cost curve, and average fixed cost curve.
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YELLOW CHIPPEROON
[What's This?]
Today, you are likely to spend a great deal of time searching the newspaper want ads trying to buy either a rechargeable battery for your cell phone or a T-shirt commemorating the 2000 Olympics. Be on the lookout for door-to-door salesmen.
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The word "fiscal" is derived from a Latin word meaning "moneybag."
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"Those who are blessed with the most talent don't necessarily outperform everyone else. It's the people with follow-through who excel. " -- Mary Kay Ash, May Kay Cosmetics founder
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SPE
Subgame Perfect Equilibrium
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