OU ECON 1123 - Exam 1 Study Guide (11 pages)

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Exam 1 Study Guide

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Exam 1 Study Guide


This study guide covers all that we talked about in lecture. Major themes include demand, supply, indifference curves, individuals and markets

Study Guide
The University of Oklahoma
Econ 1123 - Princ. of Econ-Micro

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ECON 1123 1st Edition Exam 1 Study Guide Lectures 1 10 Lecture 1 Junuary 12 Concepts covered Economic Analysis We begin to make our Economic Analysis with Observations that become data then we develop explanations theories then we test the theories Empirical More Data More theories more empirical testing etc Model Building An economic model is a stylized representation of reality Ceteris Paribus In empirical data many economic conditions are changing at the same time The simplifying assumption of ceteris paribus means that we focus on one KEY relationship at a time and all other economic conditions held conceptually constant Definitions Efficiency Positive Economics is doing the best with what you ve got Equity Normative Economics is dealing with what is fair or just Productive Efficiency producing goods at the lowest possible cost Allocative Efficiency distributing goods to the people who value them the most Labor human abilities used to produce material goods and services Capital human made aids to production examples machinery tools factories goods used to produce other goods Land all natural resources useable in production Entrepreneurship human resources and technology that bring all of these other economic resources together entrepreneurs also bear risk Note A key assumption is the entrepreneurs try to maximize profits The goal is to maximize the total revenues and minimize the total costs Good ideas will produce positive profits and bad ideas will produce negative profits Lecture 2 January 14 Concepts covered Characteristics of Competitive Markets A Many independently active buyers and sellers B Individual buyers and sellers have no control over market price price takers C Freedom of Entry and Exit into and out of the market no technological and institutional barriers to entry and exit D Highly homogeneous products Characteristics of Imperfectly Competitive MarketsA B C D Fewer independently acting buyers and sellers Some control over market price

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