Microeconomics Lecture Outline

1. Perfectly competitive markets
   • Consumers: MRS equal across all consumers
   • Producers: MRT equal across all producers

2. Arrow-Debru general equilibrium: MRS (all consumers) = price ratio = MRT (all firms)

3. Welfare calculation: (Fig. 5-1a)
   • Consumer surplus
   • Producer surplus
   • Social surplus = CS + PS

4. Tax and subsidy: (Fig. 5-1b)
   • Excess burden (EB)
   • Deadweight loss (DWL)
   • Tax base broadening