VCU ECON 203 - Final Exam Study Guide (15 pages)

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Final Exam Study Guide



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Final Exam Study Guide

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An overview of all class work for the final exam.


Pages:
15
Type:
Study Guide
School:
Virginia Commonwealth University
Course:
Econ 203 - Introduction to Economics
Edition:
1

Unformatted text preview:

ECON 203 1st Edition Final Exam Study Guide All Lectures Lecture 1 August 22 Introduction to Economics Economics is the study of choices made by people in the presence of scarcity The choices people make given the circumstances they are in microeconomics focuses on specific units and transactions macroeconomics focuses on the economy as a whole economic models are simple general and useful They assume people are rational and self interested Lecture 2 September 9 positive statements are statements of fact of what is or what would occur if something else were to happen They must be true or false normative statements state what should be They can t be true or false fallacy of composition occurs when something that may be good for one person is considered good for everyone post hoc fallacy occurs when it is assumed that since event A happened before event B A caused B It is important to avoid assuming causality just because a sequence has been noticed other conditions fallacy assuming that since two events happened together in the past that they will always occur together in the future misleading comparison comparisons that are made that do not reflect the true differences between the goods This is mostly made because people forget to account for adjustments of circumstances scarcity limited resources with limited demands Every choice made incurs a cost whether it be money or time scarce goods any good that has a higher demand than is available opportunity cost the highest cost a person is willing to pay for a good consumer demand Total use value TV the value each individual person puts on a good The amount they are willing to trade to receive the good marginal use value MV the highest price a consumer will see and still be willing to pay for a good Lecture 3 consumer demand cont principle of diminishing marginal value as consumption increases additional units will generate less value to the consumer than previous units marginal value decreases with quantity decision



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