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Intro to Microeconomics Test 1 Study Guide

by: Kaley Hicks

Intro to Microeconomics Test 1 Study Guide ECON 10223

Marketplace > Texas Christian University > Economcs > ECON 10223 > Intro to Microeconomics Test 1 Study Guide
Kaley Hicks
GPA 3.97

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About this Document

A Study Guide & Outline of important terms & information for the first exam
Intro Microeconomics
Margot Biery
Study Guide
Microeconomics, Introduction to Microeconomics, Economics, micro
50 ?




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This 2 page Study Guide was uploaded by Kaley Hicks on Friday January 22, 2016. The Study Guide belongs to ECON 10223 at Texas Christian University taught by Margot Biery in Fall 2013. Since its upload, it has received 37 views. For similar materials see Intro Microeconomics in Economcs at Texas Christian University.


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Date Created: 01/22/16
Chapter 1:  Factors of production o Land o Labor o Capital o Entrepreneur  Economic growth is a result of: o Technology Increases o Increases in Supplies of Resources o Improvements in resource quality Chapter 2:  Two Economic Systems o Market System o Command System  Characteristics of the Market System o Competition o Self-Interest o Freedom of Choice o Freedom of Enterprise o Private Property  Three virtues of the market system: Efficiency, incentives, and freedom  Command Systems Have Two Major Problems: o The Coordination Problem o The Incentive Problem  Businesses Have Three Main Categories: o Sole Proprietorship o Partnership o Corporation  Chapter 3:  Why there is an inverse relationship between price and quantity demanded: o Consumers are more willing to buy things at a lower price o Diminishing Marginal Utility o Income Effect o Substitution Effect  Determinants of Demand: o Consumer preferences o Number of buyers in the market o Consumer’s incomes o Prices of related goods o Consumer expectations  Determinants of Supply: o Resource Prices o Technology o Taxes and subsidies (taxes decrease supply, subsidies increase supply) o Prices of other goods o Producer expectation o The number of sellers in the market  Price ceiling pose two problems: Rationing Problem & Black Markets Chapter 5:  Government intervention on externalities can take the form of: o Direct Controls (passing legislation limiting the activity) o Specific Taxes o Subsidies and Government Provision  Subsidies to buyers  Subsidies to producers (tax in reverse)  Government provision (provide the product for free) Chapter 6:  Prospect Theory- sheds light on how consumers plan for and deal with goods & bads. 3 facts: o People judge goods & bads in relative to their current situation – status quo o People experience diminishing marginal utility for gains and diminishing marginal disutility for losses o People are loss adverse Powerpoint notes:  Markets tend to fail in the context of: o Competition o Distribution o Spillovers o Stability  Public goods meet two criteria: o They can be used simultaneously o Their use cannot be restricted


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