Exam 1 Study Guide Microeconomics Dr Creswell Section 004 005 Exam One Content Chapter 1 The World Around You Chapter 2 Opportunity Costs Specialization Chapter 3 Supply Demand The Price System Chapter 4 1 The Market System Chapter 6 Price Elasticity of Demand Use the power points this study guide to help you when you are studying I will be going over this material in my sessions on Thursday 1 2 Bowman 223 and 3 45 4 45 in CHH 011 and through next week as needed Please print this guide out on your own and bring it to session if you have questions Go to class study for the exam Exam 1 Study Guide 1 What is economics What is the difference between macro and micro 2 What is scarcity an economic good and an economic bad 3 Describe the mistake of association is not causation 4 What is the difference between a positive and normative statement POSITIVE STATEMENT NORMATIVE STATEMENT 5 Describe what is happening when someone is acting in their rational self interest 6 Define Resources List the factors of production and the income related with each Name them and how they are paid 7 What is opportunity cost 8 Explain the Productions Possibility Curve PPC 9 Name a couple ways economic growth can happen and how is it shown on a PPC 10 Why is the PPC bowed outward 11 For the following problem figure out the opportunity cost for each good for each person and explain who has the comparative advantage in producing each Jeremy Paperclips tons per hour 10 Headphones per hour 2 1 The comparative advantage the ability to produce a good or service at a lower opportunity cost than someone else Beth 3 Headphones Paperclips 12 List the four allocation systems and explain if each one is fair and what the incentive for each is 13 What is the law of demand 14 What is the difference between a change in quantity demanded and a change in demand Draw it please 15 List the 5 determinates of demand Please explain how a change in the determinate is related to a change in demand 1 2 3 4 5 16 What is the law of supply 17 What is the difference between a change in quantity supplied and a change in supply 18 List the five factors of supply and explain how a change in each is related to a change in supply 19 What is the equilibrium price and quantity on the graph below 20 What is a price floor Does it cause a shortage or surplus What happens to price Draw one below 21 What is a price ceiling Does it cause a surplus or shortage What happens to price Draw one below 22 If initially at equilibrium and supply shifts to the right what happens to equilibrium price and quantity Draw it below 23 What is price elasticity of demand and what is the formula for it e d D Q P 24 How do we know if an elasticity is elastic unit elastic or inelastic 25 Below draw a perfectly inelastic perfectly elastic inelastic and elastic demand curve 26 Typically along a demand curve where is the elastic unit elastic and inelastic portion 27 List and describe the determinants of price elasticity of demand 28 Calculate the price elasticity of demand between points A and B I ll draw it out in session But you can apply it with these points P1 5 P2 2 Q1 100 Q2 150 29 If the price of a Porsche rises from 65 000 to 75 000 and quantity supplied rises from 10 000 to 15 000 What is the price elasticity of supply 30 Suppose a 10 increase in price for Good A causes a 5 decrease in Quantity demanded for Good B what is the cross price elasticity and are they substitutes or compliments 31 Below draw a perfectly inelastic perfectly elastic inelastic and elastic supply curve 32 What would a short run supply curve look like elastic wise compare to a long run supply curve 33 Suppose the price elasticity for demand for beer 1 75 and the price elasticity of supply is 1 23 Who does more of the tax incidence fall on Why 34 What is consumer sovereignty 35 What is a market 34 What is bartering Create your own example please 35 Define Creative Destruction 35 How can a country gain from trade GOOD JOB GOOD LUCK ON YOUR EXAM YOU GOT THIS
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