Markets: Exchange economy ; Algebraic exchange economy ; Production economy ; Consumer and producer surplus -- Externalities: Externalities and negotiation ; Permit trading ; Renewable common property resources ; Co-ordination failures -- Public goods: Pure public goods ; Two examples of pure public goods ; Impure public goods ; Link between public goods and externalities -- Imperfect competition: Monopoly ; Pricing rules under imperfact competition -- Taxation and efficiency: Taxation ; Welfare cost of tax interactions ; Theory of the second best -- Asymmetric information and efficiency: Asymmetric information ; Preference revelation ; Regulation of a natural monopoly ; Other examples of asymmetric information -- Asymmetric information and income redistribution: The Distribution of income ; Limits to income redistribution ; Redistributing income through tagging and targeting ; Role of government in a market economy

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