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III. Factor Markets . . . . . . . . . . . . . . . . . . . . . . . . (10–18%)
A. Derived factor demand
B. Marginal revenue product (formula)
C. Combination of products to achieve maximum profit and minimum profit
D. Wage decision for competition and monopolistic markets
IV. Market Failure and the Role of Government . . . . . . . (12–18%)
A. Externalities
1. Marginal social benefit and marginal social cost
2. Positive externalities
3. Negative externalities
4. Remedies in Graph.
B. Public goods
1. Public versus private goods
2. Quasi-public goods
3. Provision of public goods
C. Market Failure
1. Reasons
2. Public policy to promote completion: Antitrust policy, Regulation
D. Income distribution
1. Lorenz curve
2. Initiator for income inequality