About this course: Perfect markets achieve efficiency: maximizing total surplus generated. But real markets are imperfect. In this course we will explore a set of market imperfections to understand why they fail and to explore possible remedies including as antitrust policy, regulation, government intervention. Examples are taken from everyday life, from goods and services that we all purchase and use. We will apply the theory to current events and policy debates through weekly exercises. These will empower you to be an educated, critical thinker who can understand, analyze and evaluate market outcomes.
Created by: University of Pennsylvania
Taught by: Rebecca Stein, Senior Lecturer
Economics
| Language | English, Subtitles: Mongolian |
| How To Pass | Pass all graded assignments to complete the course. |
| User Ratings |
Syllabus
WEEK 1
Costs and Profits + Perfect Competition
In the first part of the course we learnt that if we allow market forces to work we reach an efficient outcome: the maximum benefit that can be generated by a market. The second part of the course explores cases where the markets fail to accomplish our goals. This week sets up the benchmark case of the perfectly competitive market: a model we will modify in the next few weeks. We define Perfect Competition, learn to model it graphically and discuss some key results in terms of long run profits and implications for efficiency.
20 videos
- Video: 1.1.0: When Markets Fail: Introduction
- Video: 1.1.1: Defining Profits
- Video: 1.1.2: Defining Fixed Costs and Variable Costs
- Video: 1.1.3: Marginal Productivity
- Video: 1.1.4: Marginal Productivity: Definition
- Video: 1.1.5: Marginal Cost
- Video: 1.1.6: Average Cost
- Video: 1.1.7: Graph of Marginal and Average Cost Curves
- Video: 1.2.1: Perfect Competition: Definition
- Video: 1.2.2: Profit Maximization Perfect Competition
- Video: 1.2.3: Profit Maximization: MR=MC
- Video: 1.2.4: Profit Maximizations vs. Making Profits
- Video: 1.2.5: Profit Maximization: The Case of Losses
- Video: 1.2.6: Perfect Competition: The Firm's Supply Curve REPLACE
- Video: 1.2.7: Definition of Short Run vs. Long Run
- Video: 1.3.1: Perfect Competition: Firm Entry When Profits are Positive
- Video: 1.3.2: Perfect Competition: Firm Entry When Profits are Negative
- Video: 1.3.3: Perfect Competition: An Efficient Outcome
- Video: 1.3.4: Perfect Competition: In The Long Run
- Video: 1.3.5: Perfect Competition: An Efficient Outcome Pt 2
- Discussion Prompt: Firm and Profit Maximization
Graded: 1.1: Costs and Profits
Graded: 1.2: Perfect Competition: Definition and Output
Graded: 1.3: Perfect Competition: Implications for Efficiency
WEEK 2
Monopoly
A monopoly is a case where there is only one firm in the market. We will define and model this case and explain why market power is good for the firm, bad for consumers. We will also show that society as a whole suffers from the lack of competition.
13 videos
- Video: 2.1.1 Monopoly: Definition
- Video: 2.1.2: The Monopoly as a Price Setter
- Video: 2.1.3 Marginal Revenue vs Price: Numerical Example
- Video: 2.1.4 Marginal Revenue vs Price: Graphical Example
- Video: 2.1.5 Marginal Revenue vs Price: Example Using Calculus
- Video: 2.1.6 Profit Maximization in a Monopoly
- Video: 2.1.7 Profit Maximization in a Monopoly: Numerical Example
- Video: 2.2.1 Monopoly vs Perfect Competition
- Video: 2.2.2 Efficiency loss under a Monopoly
- Video: 2.2.3 Monopoly vs Perfect Competition: Numerical Example
- Video: 2.2.4 Monopoly vs Perfect Competition: Example of Dead Weight Loss
- Video: 2.2.5 Monopoly vs Perfect Competition: Summary
- Video: 2.2.6 Why do we allow monoplies?
- Discussion Prompt: Monopoly in Real Life
Graded: 2.1: Monopoly definition
Graded: 2.2: Monopoly vs. Perfect Competition Numerical example
WEEK 3
Monopoly Continued
Monopolies come in various types: one price monopoly, natural monopoly, price discrimination and monopolistic competition. This week we will expand the basic monopoly model to cover these cases and then explore market outcomes in each case. We will also discuss how government may intervene in such cases to benefit society as a whole and increase the surplus generated by the market.
14 videos
- Video: 3.1.1 Natural Monopoly: Definition
- Video: 3.1.2 Government Regulation and Antitrust Law
- Video: 3.1.3 Natural Monopoly: Implications for the Average Total Cost
- Video: 3.1.4 Natural Monopoly: Graphical Presentation
- Video: 3.1.5 Natural Monopoly: Profit Maximizing Outcome
- Video: 3.1.6 Natural Monopoly: Regulation though Marginal Cost Pricing
- Video: 3.1.7 Natural Monopoly: Regulation though Average Cost Pricing
- Video: 3.2.1 Price Discrimination: Definition
- Video: 3.2.2 Price Discrimination: Graphical Example
- Video: 3.3.1 Monopolistic Competition: Definiton
- Video: 3.3.2 Monopolistic Competition: Core Results
- Video: 3.3.3 Monopolistic Competition: Graphical Presentation in the Short Run
- Video: 3.3.4 Monopolistic Competition: Graphical Presentation in the Long Run
- Video: 3.3.5 Monopolistic Competition: Mark up and Excess Capacity
- Discussion Prompt: Different Market Structures and Government Intervention
Graded: 3.1: Natural Monopoly
Graded: 3.2: Price Discriminating Monopoly
Graded: 3.3 Monopolistic Competition
WEEK 4
Externalities + Public Goods
Two classic cases of market failure will be defined and explored: externalities and public goods. We will define each case, demonstrate why the market fails to provide the efficient outcome and suggest interventions through either marked design or regulation.
20 videos
- Video: 4.1.1: Externalities: Definition
- Video: 4.1.2: Externalities: Allocative Efficiency: Refresher
- Video: 4.1.3: Negative Externalities: Implications for Efficiency
- Video: 4.1.4: Positive Externalities: Implications for Efficiency
- Video: 4.1.5: The Coase Theorem
- Video: 4.1.6: Interalizing a Negative Externality via a Per Unit Tax
- Video: 4.1.7: Interalizing a Positive Externality via a Per Unit Subsidy
- Video: 4.2.1: Externalities: A Numerical Example
- Video: 4.2.2: Interalizing a Negative Externality via Tax: A Numerical Example
- Video: 4.2.3 Government Intervention in the Case of Externalities
- Video: 4.2.4 Externality: Conclusion
- Video: 4.3.1 Pure Public Goods: Nonexcludable and Nonrival
- Video: 4.3.2: Examples of Different Types of Goods
- Video: 4.3.3: Implications of Nonexcludability
- Video: 4.3.4: Free Riding
- Video: 4.3.5: Implications of Nonrivalness
- Video: 4.4.1: The Role of the Government in Providing Public Goods
- Video: 4.4.2: Provision of Public Good by the Government
- Video: 4.4.3: Free Riding as a Prisoners' Dilemma
- Video: 4.4.4: Public Goods Conclusion
- Discussion Prompt: Externality and Government Intervention
Graded: 4.1: Externalities
Graded: 4.2: Solutions to Externalities
Graded: 4.3: Public Goods
Graded: 4.4: Solutions to Public Goods
WEEK 5
Asymetric Information and Inequlity
Up to this point we assumed that there is full information in the market. We are now ready to relax this assumption as we introduce the concepts of moral hazard and adverse selection. We learn that asymmetric information may lead to market failure and we discuss some remedies. The last segment in the course is a reminder that besides efficiency, equity is also a criteria we all care about. A short introduction will explore how economist measure poverty and inequality.
10 videos
- Video: 5.1.1 Adverse Selection
- Video: 5.1.2 Adverse Selection: Consequences and Solutions
- Video: 5.1.3 Adverse Selection: A Numerical Example
- Video: 5.1.4 Adverse Selection: A Numerical Example with Private Information
- Video: 5.1.5 Adverse Selection: Possible Solutions
- Video: 5.1.6 Moral Hazard
- Video: 5.1.7 Moral Hazard: Consequences and Solutions
- Video: 5.2.1 Inequality
- Video: 5.2.2 Poverty
- Video: 5.2.3 Income Redistribution
- Discussion Prompt: Measuring Poverty
Graded: 5.1: Asymmetric Information
Graded: 5.2: Poverty and Inequality
Graded: Final Exam
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University of Pennsylvania
The University of Pennsylvania (commonly referred to as Penn) is a private university, located in Philadelphia, Pennsylvania, United States. A member of the Ivy League, Penn is the fourth-oldest institution of higher education in the United States, and considers itself to be the first university in the United States with both undergraduate and graduate studies.
Ratings and Reviews
I have really enjoyed this course because I felt that I was finding out some important things to understand a social system. The lectures were also very understandable even I had no basis on Economics. I very appreciate these worth
This Economics course is succinct and understandable and it backs up the theory with clearly explained graphical illustrations. The use of simple mathematical equations to back up the graphical assumptions clarified my doubts and the explanations provided were comprehensive. The last few weeks tended to give easy-to- follow examples related to America. I feel like the course is geared more towards those who have at least basic understanding of Economics as otherwise the diagrams may seem confusing at first.
thought proVoking and sooo helpful !
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jg
amazing program for students who are interested in economics