ECO 2030. Principles of Economics-Price Theory
Exam #3 Study Guide
Cumulative Material
Chapter 1
- Key Concepts: scarcity, opportunity cost, "free lunch",
marginal analysis, self-interest,
sunk cost, money
Chapter 4
- Key Concepts: law of demand, demand shifts (tastes, income, prices of
related goods, number of consumers), law of supply, supply shifts (input
costs, technology, number of firms); shifts of demand and supply
New Material
Chapter 8
- Key words: burden of a tax (i.e., who pays?), effects of a tax on
market price and quantity, deadweight loss, deadweight loss and demand
elasticity, taxation and welfare (i.e., changes in
consumer and producer surplus)
-
Problems and applications (p. 173): #1 (a, b)
-
Answer Key (PDF)
Chapter 9
Key words: comparative advantage, winners and losers from trade,
gains from trade, trade and welfare, tariffs, quotas, protectionism and
welfareProblems and applications (pp. 196-197): #1, #4Answer Key (PDF)
Chapter 18
- Key words: labor demand (marginal product of labor, diminishing marginal
product, value of the marginal product), labor supply, (labor-leisure
tradeoff), supply elasticity and tax incidence
Chapter 10
- Key words: market failure, negative externality, positive
externality, market inefficiency, internalize externalities (taxes and
subsidies)
Chapter 11
- Key words: rival, nonrival, excludable, nonexcludable, public goods,
common (property) resources, free riders, market inefficiency,
value of statistical life, benefit-cost analysis
Chapter 13
- Key Concepts:
total revenue, total cost, profit, profit maximization,
explicit costs, economic profit, accounting profit, production function,
marginal product, diminishing marginal product, fixed costs, variable costs,
average total cost, average fixed cost, average variable cost, marginal
cost, economies of scale,
short run, long run
Chapter 14
- Key Concepts: competitive market,
price taker, marginal revenue, shut
down decision, short run equilibrium, long run equilibrium, efficiency, free
entry and exit
Chapter 15
- Key Concepts: monopoly, barriers to entry,
price maker,
short run equilibrium, long run equilibrium, deadweight loss, efficiency,
antitrust policy
Chapter 16
- Key Concepts:
oligopoly, monopolistic competition, duopoly,
game theory,
collusion, cooperation
Chapter 22
Key Concepts: asymmetric information
Practice test #1
(graph questions)
Practice test #2 (questions
20-31)