Principles Of Microeconomics
Principles Of Microeconomics ECON 2010
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This 2 page Study Guide was uploaded by Jada Mayer on Wednesday September 30, 2015. The Study Guide belongs to ECON 2010 at Western Michigan University taught by Staff in Fall. Since its upload, it has received 10 views. For similar materials see /class/216947/econ-2010-western-michigan-university in Economcs at Western Michigan University.
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Date Created: 09/30/15
This is a study guide for the first midterm examination and 3 N Midterm Exam 1 Study Guide The exam will cover chapter l2 There are 40 questions in the exam General rules a b V Read the book and your class notes Pay attention to every graph and table in your notes the textbook as well as the problem sets Make sure you understand every detail in these graphs and tables You must practice on questions in the problem sets The exam questions are similar to the ones in these problem sets Use your intuition to solve questions For key concepts you should have in your mind related stories This will greatly help you solve questions that are applications of theory You must attend the review session Email me or come to my office ifyou have any question Key points chapter 1 n V Q Scarcity economics Tradeoff Understand the tradeoff between efficiency and equity Opportunity cost Note opportunity costs include the direct cost such as accounting cost Rationality What is marginal analysis Why do rational people think at the margin Incentives Trade can make everyone better off Markets are usually a good way to organize market activity Know that a market economy is a decentralized economy A lot of households and firms are making decisions The role of price in a market economy The difference between a market economy and a planned economy The role of gov Enforce property right To promote efficiency and equity are the other two reasons that a gov may intervene Understand the causes of Market failure and externality How are they related to efficiency The relation between productivity and standard of living economic growth Key points chapter 2 a b O 8VV The economist as scientist The scientific method The role and purpose of assumptions and models in economics Know the circular ow diagram and the story The PPF Understand Figure 2 know the meanings of points in the figure39 know why it is bowed out39 how to calculate opportunity cost given a graph know the stories related to the curve Understand Figure 3 know the meaning of shift in the PPF Micro and Macro economics The relationship between them Positive VS normative How to determine a statement positive or normative The responsibility of the Council of Economic advisers Why do economists disagree Key points chapter 3 n V Why do people trade The advantage of specialization Trade allows the rancher and the farmer consume outside their own PPF So trade makes every one betteroff Absolute advantage Know how to determine who has absolute advantage Comparative advantage Know how to determine who has comparative advantage Know that economists generally support free trade
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