EC 110 - Microeconomics
Ch. 1 Principles of Economics
Def. and Concepts.
What is the study of economics? What is microeconomics and macroeconomics?
What is equality (equity)? What is scarcity?
What is efficiency?
What are tradeoffs and opportunity costs? How do you measure opportunity costs? Examples.
What is rationality and thinking at the margin?
What are incentives? Examples.
Benefits of trade
What is a market and market economy?
What is the Invisible Hand and how does it maximizes economic well being?
What is a market failure?
Ch. 2 Thinking like an Economist
Def. and Concepts.
What are models? (economics models)
Characteristics of the Circular Flow Diagram.
How does the Circular Flow Diagram work? Who are its “actors” and what do they do? What are the two markets? Know what flows from each actor to each market..etc.
What are the factors of production and the payments to them?
Characteristics of the Production Possibility Frontier (PPF).
How does the PPF work? What does it tell us? What are Efficient, Inefficient, and Unobtainable Points on the PPF?
Increasing and constant opportunity costs and how they affect the shape of the PPF.
What causes the PPF to shift or pivot outward? And what would be the result of the shift?
Normative vs. Positive statements
Ch. 3Absolute and Comparative Advantage
Def. and Concepts.
Solving for Absolute Advantage.
Characteristics or Rules of Comparative Advantage.
Solving for Comparative Advantage (Calculating the Opportunity Costs for each producer and for each good.)
What is specialization?
Ch. 4 Supply and Demand (KNOW EVERYTHING IN THIS CHAPTER)
Def. and Concepts.
Difference between Demand and Quantity Demand (QD) and how they appear on a graph.
How do you create a market demand curve?
What is the Law of Demand?
Why does a demand curve slope downward?
Difference between moving along a demand curve and shifting a demand curve.
Difference between “Change in Demand” and “Change in Quantity Demanded”.
What causes a movement along the demand curve? (Remember, if you move upward along a demand curve, that is a decrease in quantity demanded. If you move downward along a demand curve, that is an increase in quantity demanded.)
What causes a shift of the demand curve? (Remember, if the demand curve shifts to the right, that is an increase in demand. If the demand curve shifts to the left, that is a decrease in demand.)
What are the Determinants of Demand and how a change in them will shift the demand curve?
Normal vs. Inferior Good
Substitutes vs. Complements
Difference between Supply and Quantity Supplied (QS) and how they appear on a graph.
How do you create a market supply curve?
What is the Law of Supply?
Why does a supply curve slope upward?
Difference between moving along a supply curve and shifting a supply curve.
Difference between “Change in Supply” and “Change in Quantity Supplied”.
What causes a movement along the supply curve? (Remember, if you move upward along a supply curve, that is an increase in quantity supplied. If you move downward along a supply curve, that is a decrease in quantity supplied.)
What causes a shift of the supply curve? (Remember, if the supply curve shifts to the right, that is an increase in supply. If the supply curve shifts to the left, that is a decrease in supply.)
What are the Determinants of Supply and how a change in them will shift the supply curve?
Supply and Demand Together.
What is an Equilibrium?
How do you determine equilibrium price and quantity? (Both on a graph and mathematically.)
Shortage vs. Surplus and how they appear on a S & D graph.
What happens to the equilibrium price and quantity if the supply curve shifts, if the demand curve shifts, or if both supply and demand shift? (Remember, if both supply and demand are shifting in the same direction, quantity will change but price will be ambiguous or unknown. And remember, if supply and demand are shifting in opposite directions, price will change but quantity will be ambiguous or unknown.)