Building on the foundational knowledge acquired in the first part of the Advanced General Equilibrium course (Ec 121a), this second half of the course ventures into the study of Partial Equilibrium Analysis, Welfare Theorems, and Market Failures. Students will engage with Partial Equilibrium Analysis to understand the equilibrium conditions of specific markets in isolation, appreciating how changes in supply and demand in one market can impact prices and quantities without considering the economy-wide effects. This segment sets the groundwork for a deeper exploration of economic efficiency and resource allocation through a blend of theoretical insights and case studies. Then the course explores the First and Second Welfare Theorems, highlighting how, under ideal conditions, markets can achieve optimal social outcomes. The First Welfare Theorem shows that competitive markets lead to Pareto efficiency, where improving one's situation without harming another is impossible. The Second Theorem suggests that any Pareto efficient outcome can be reached through market equilibrium with correct resource distribution. However, real-world deviations such as monopolies, public goods, and externalities are examined to understand market failures and the potential for government intervention to enhance social welfare. This section equips students with the tools to evaluate economic policies, their efficiency, and their impact on society.