nce" into the sector.
A classical view of the factors that lay the groundwork for market structures. The role of
a marginal scale of output and of the concentration of production connected therewith.
Corrections entered by the new industrial economics: the role of the firms' behavior and
of potential competition for the formation of the market structure.
TOPIC 10 THE PRICE FORMATION FOR THE SERVICES OF THE PRODUCTION
FACTORS AND THE INCOME FROM THEIR USE
Interdependency of production factors and the random character of demand for them.
Marginal (physical) and marginal value product of the production factor (labor, capital,
land). The condition for an optimization of the number of production factors involved in
the production (equating a marginal value product of each production factor to the price
of services provided by it, or, which is the same thing, equating the quotient of each
production factor's marginal physical product by the price of services provided by it with
the value inverse to the end products produced by these factors). The curve of the
marginal value product of the production factor as a firm's demand curve for this product.
The curves of production factors' supply by individual households and firms. The general
supply and demand curves of the production factors. The equilibrium prices of production
factors and the revenue allocation.
TOPIC 11 LABOR MARKET AND WAGES
The definition of wages under the conditions of free competition in the labor market. The
factors that lay the groundwork for the demand on labor (the quality of workforce, capital
accumulated, the quality of technologies applied, the art of management). Factors which
determine the supply of labor (the dynamism of the size of population, particular features of
the population's desire to increase its labor contribution). Equilibrium in the labor market
and the main reasons for the difference in the labor remuneration (difference which
compensates harsh working conditions; difference in the quality of work; the rent elements
in the wages and salaries of unique specialists; existence
of groups within the workforce that are not competing with each other). Trade unions and
their effect on the labor market.
Specificity of labor relations regulation in the Russian Federation.
TOPIC 12 THE MARKETS OF LAND AND THE MONEY MARKETS. THE
RENT, THE INTEREST AND THE PROFIT
The rent as an income from the fixed factors of production. The rent's derivativeness for
the natural factor of production from the price generated with the help of this productdriven factor. The role of the rent and of other factor-driven incomes in maintaining
efficiency when using limited resources.
Capital and the "roundabout" modes of production. The rental fee for using capital goods
and the return on capital. Savings, financial assets and their
discounted value. The mechanism for defining the return on capital and the level of the
rate of interest. The short-term and long-term equilibrium in the money market, the
concept of a natural rate of interest. The influence produced on the money market by the
uncertainty and the risk and by technological changes.
The nature of profit.
TOPIC 13 UNCERTAINTY AND RISK IN THE ECONOMY
The concepts of uncertainty and risk. Risk aversion and its connection with the
conception of diminishing utility. Insurance as a way of risk distribution. The money
market as an instrument for risk distribution.
Non-insurable risks as a manifestation of a "market failure". The problem of moral hazards
and the adverse selection. The opportunities of social security insurance.
Speculative markets as instruments of the transfer of goods and services in time and space
flowing from surplus to deficit (arbitration between space- distant markets, speculative
activities aimed to draw profit from a possible change of prices in time). Speculation and
risk distribution; the hedging of risks. The role of speculation in maximizing the utility.
Negative aspects of speculative behavior.
TOPIC 14 INTRODUCTION INTO THE WELFARE ECONOMICS
Justice and efficiency. Perfect competition and the Pareto efficiency. Market structures'
imperfection as well as the absence of individual markets
- the side-effects markets (for example, the pollution of the environment), the markets for
most "future goods", the markets of all types of risks (i.e. the existence of non-insurable
risks) - as the major causes for the existent market failures). Incomplete information at the
disposal of economic agents, the existence of public goods and the market failures.
TOPIC 15 THE GENERAL EQUILIBRIUM THEORY AND THE WELFARE