Chapter 13

This chapter is about the production of goods and the cost of that production.
Costs and production may vary as they increase.
The amount of goods made may increase at a smaller amount every time another employee is added.
All kinds of costs of production must be taken into account by suppliers to maximize profits.
Industrial organization is the study of how firms' decsions about prices and quantities depend on the market conditions they face.
A firm's average total cost is total cost divided by the quantity of the output, and its marginal cost is the amount by which total cost rises if output increased by 1 unit.

Chapter 11

Chapter 11 is about different goods in the market and how they can be separated.
They can be excludable or rival in consumption.
An excludable good, is a good that can cause people to be prevented from using the good, usually involving price.
A rival in consumption means that one person's use of a good reduces another person's ability to use the same good.
These are are exemplified using the Punnet Square.
The different types of goods are public, private, common resource, and natural monopoly.
A public good is a good that is neither rival in consumption nor excludable.
A private good is excludable and rival in consumption.
A common resource is rival in consumption, but isn't excludable.
A natural monopoly is excludable, but isn't rival in consumption.
Public goods are government made and have positive externalities.
Private goods are government made and have negative externalities.

Chapter 10

This chapters talks about the affects of externalities.
Externalities occur when important economic interactions take place outside of the market so the true cost of the good isn't shown.
Negative externalities cause the social cost of a good to be above the supply curve.
Positive externalities put the social cost of a good above the demand curve.
Both of them create market inefficiency.
The two ways to solve externalities is through private policy or government regulation.
The government's way to solve these inefficiencies is through taxes and subsidies.
Negative externalities should be taxed.
Positive externalities should be subsidized.

Chapter 8

Taxes get the government revenue therefore it is necessary.
However, taxes make the market smaller.
The larger a tax, the less revenue received as the market becomes smaller.
The Laffer Curve shows that at first revenue increases, but as it continues to increase the revenue slowly becomes less and less.
Deadweight loss of taxation is the lost gains from trade because of tax making a smaller market.
More elastic curves result in a large deadweight loss.
Inelastic curves result in the opposite.
The reduction in consumer and producer surplus is often larger than tax revenue.

Chapter 7 Blog

Key vocab that is mentioned is the willingness to pay and consumer surplus.
Consumer surplus is max amount a buyer is willing to pay for a good minus amount buyer actually pays.
Demand curves of buyers aren't drawn with steps because the changes in buyers dropping out from the new price is very small and becomes essential to create a smoother curve.
Consumers want to pay the least and producers want to receive the most possible.
Different people have different values for the same good.
Efficient markets maximize consumer surplus and producer surplus occurring at equilibrium.
Economic welfare has to do with the amount buyers save, producers make, and how even they are.