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UH / Economics / ECON 222 / What is Equilibrium in supply and demand?

# What is Equilibrium in supply and demand? Description

##### Description: Lengthy but not fully inclusive study guide for chapters 1-5
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Economics 222

## What is Equilibrium in supply and demand? Study guide #1

Chapters 1- 5

1. What is an economic agent?

2. Explain the difference between positive and normative economics.

3. Using data to get answers to interesting questions is referred to as ________________.  4. Describe Optimization ______________.

5. Optimizing in levels

a. Express all ______ and ____________.

b. Calculate total ____ ___________ for each option.

c. Choose the option with the ___________ net benefit.

6. Optimizing in deferences

a. Express all ______ and ____________.

b. Calculate how cost and benefits ________ as you move between options   c. Apply Principle of ________________ at the margin, move towards the option that makes you  _________ off and away from the option that makes you _________ off.

7. What is Equilibrium in supply and demand?

## What are the three principles of economics? 8. Define causation and how it is different than correlation. Define correlation.  9. When a model leaves out one or more important variables. __________________  10. Define reverse causality.

11a. Write out the National Income Equation

then,

11b. Write out the GDP equation.

11c. Define all the variables in both equations.

C =

I =

G =

X =

M =

NX =

12. Name the five things not included in GDP.

I.

II.

III.

IV.

V.

13. Now, Define GDP and how it is different that GNP. Define GNP.  14. Real GDP? vs. Nominal GDP? Explain both and the distinction between them.

15. What is the GDP deflator? And how do you calculate it ( write out the formula )  16. Define CPI.  Don't forget about the age old question of es 300 class notes

17. Define scarcity.

18. Two properties of a good economic question: ( don’t answer just know this. )  1. Relevant and important

## What is an economic agent? Don't forget about the age old question of faulty listening behaviors

18. What are the three principles of economics

a.

b.

c.

19. The scientific method ( empiricism ) has two steps

a. Develop ________ that explain some part of the world

b. _______ those models using data to see how closely that match what we actually observe  20. Two important features of models: ( don’t answer just know this )

a. They are not exact.

b. They generate predictions that can be tested with data.

21a .What is a controlled experiment?

21b. What is a natural experiment?

22. Explain a trade-off and give an example.  Don't forget about the age old question of uc merced physics

23. Define opportunity cost.

24. What is a market price?

25. What does it mean when a market is perfectly competitive?

26. Explain WTP or willingness to pay.

27. Define these

Quantity demanded -

Quantity supplied -  We also discuss several other topics like criminal justice study guide
Don't forget about the age old question of pentified
Don't forget about the age old question of mark davidson utsa

Demand schedule -

Demand curve -

Market demand curve -

Supply schedule -

Supply curve -

Market supply curve -

Competitive equilibrium -

Excess demand -

Excess supply -

Know this. The demand curve shifts when the following things change:  1. Tastes and preferences

2. Income and wealth

3. Availability and prices of related goods

4. Number and scale of buyers

5. Buyers expectations of the future

Also. The supply curve shifts when the following things change:  1. Input prices

2. Technology

3. Number and scale of sellers

4. Sellers expectation of the future

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