REVIEW FOR FINAL EXAM
STUDY GUIDE FOR FINAL EXAM
Remember to bring a #2 pencil, eraser, non-programmable non-graphical calculator, a picture ID and your brain cells
You an bring markers or highlighters to help you find consumer and producer surpluses for the graphs in chapters 9 and 7 The final consists of 50 multiple choice questions. Number of questions from each chapter is highlighted.
BASIC RULE TO USE WHEN STUDYING: THE MORE RECENT THE MATERIAL, THE MORE TIME YOU SHOULD SPEND STUDYING IT
Material which was covered in class but does not appear on this review sheet will not be on your exam.
Examples of problems relating to material in the study guide are in red!
Everything in purple are the things that were specifically asked to know, and were typed out in the study guide by the professor!
CHAPTER 1: The Ten Principles of Economics (2 questions)
Definitions:
(i) definition and examples of opportunity cost.
OPPORTUNITY COST of an item is what you give up to get that item college athletes who drop out of school in order to go pro and earn millions give up college education to getlots of money playing for a pro sports team opportunity cost of college is very high, benefit of the college education is not worth the cost of giving up the money they would be making playing pro sports.
(ii) what causes Market failure.
MARKET FAILURE: a term economists use to refer to a situation in which the market on it’s own fails to produce an efficient allocation of resources.
Causes of market failure:
1) externalities
2) market power
(iii) definition of Market power / monopoly.
MARKET POWER: refers to the ability of a single person (or a small group) to unduly influence market prices
a) if everyone in town needs water but here is only one well , the owner of the well is not subject to the rigorous competition with which the invisible hand normally keeps self-interest in check.
MONOPOLY: a firm that is the sole seller of a product without close substitutes
(iv) definition of
Remember to bring a #2 pencil, eraser, non-programmable non-graphical calculator, a picture ID and your brain cells
You an bring markers or highlighters to help you find consumer and producer surpluses for the graphs in chapters 9 and 7 The final consists of 50 multiple choice questions. Number of questions from each chapter is highlighted.
BASIC RULE TO USE WHEN STUDYING: THE MORE RECENT THE MATERIAL, THE MORE TIME YOU SHOULD SPEND STUDYING IT
Material which was covered in class but does not appear on this review sheet will not be on your exam.
Examples of problems relating to material in the study guide are in red!
Everything in purple are the things that were specifically asked to know, and were typed out in the study guide by the professor!
CHAPTER 1: The Ten Principles of Economics (2 questions)
Definitions:
(i) definition and examples of opportunity cost.
OPPORTUNITY COST of an item is what you give up to get that item college athletes who drop out of school in order to go pro and earn millions give up college education to getlots of money playing for a pro sports team opportunity cost of college is very high, benefit of the college education is not worth the cost of giving up the money they would be making playing pro sports.
(ii) what causes Market failure.
MARKET FAILURE: a term economists use to refer to a situation in which the market on it’s own fails to produce an efficient allocation of resources.
Causes of market failure:
1) externalities
2) market power
(iii) definition of Market power / monopoly.
MARKET POWER: refers to the ability of a single person (or a small group) to unduly influence market prices
a) if everyone in town needs water but here is only one well , the owner of the well is not subject to the rigorous competition with which the invisible hand normally keeps self-interest in check.
MONOPOLY: a firm that is the sole seller of a product without close substitutes
(iv) definition of