Final Exam Review Topics

Topics for Final Econ 101 Exam Part 1 Opportunity Cost Absolute Advantage Comparative Advantage Production Possibility Frontier Marginal Rate of Transformation Law of Increasing Opportunity Cost Law of Diminishing Returns The PPF and Growth Demand Law of Demand Demand versus Quantity Demanded Determinants of Demand Aggregate Demand Supply Law of Supply Supply versus Quantity Supplied Determinants of Supply Aggregate Supply Equilibrium Changes in Equilibrium Consumer Surplus Producer Surplus Price Floor Price Ceiling International Trade Elasticity Price Elasticity of Demand Slope of the Linear Demand versus Price Elasticity of Demand Midpoint Formula Perfectly Elastic, Perfectly Inelastic and Unit Elastic Demand Price Elasticity of Demand and Total Revenue Determinants of Price Elasticity of Demand Cross Price Elasticity of Demand Income Elasticity of Demand Elasticity of Supply Elasticity of Labor Supply Part 2 Budget constraint Opportunity set Slope of the budget constraint Shifts and rotations of the budget constraint Total utility and marginal utility The law of diminishing marginal utility Indifference curve Marginal rate of Substitution Properties of indifference curves Consumer equilibrium Deriving the demand curve for a good Deriving the Engel curve for a good Substitution effect and income effect Production Product curves: TP, AP, MP Increasing returns to labor Diminishing returns to labor Negative returns to labor Perfect competition Revenue curves: TR, AR, MR Cost curves: TC, TVC, TFC, AC, MC, AVC, AFC Changes in fixed costs Changes in variable costs Short run versus long run Profit maximization for the competitive firm Short run equilibrium for the perfectly competitive firm Profits or losses for the competitive firm The short run supply for the competitive firm The shut down point for the competitive firm The long run average cost for the competitive firm Long run equilibrium for the competitive firm Zero economic profits Increasing returns to scale or economies of scale Decreasing returns to scale or diseconomies of scale Inputs, complementary or substitutable The marginal revenue product curve The derived demand for an input The factor substitution effect The output effect Movement along the demand for an input Shifts of the demand for an input Perfectly inelastic supply in the market for land Using more than one inputs in production Partial equilibrium General equilibrium Efficient allocation of resources among firms Efficient distribution of output among households Producing efficient mix of output Allocative efficiency Pareto efficiency or Pareto optimality Sources of Market failure Part 3 Monopoly Barriers to entry Revenue curves for the Monopolist The Monopolist Equilibrium No supply curve for the Monopolist Long run versus Short run The shut down decision Monopoly versus Perfect Competition Price discrimination First-degree price discrimination (or perfect price discrimination) Third-degree price discrimination Monopolistic Competition Short run equilibrium Long run equilibrium The case for advertising and product differentiation The case against advertising and product differentiation Oligopoly The Collusion model The Cournot model with reaction functions The Price Leadership model Game Theory Players, strategies, payoff matrix Dominant strategy Nash equilibrium Maxmin strategy Maxmin equilibrium Public goods Important characteristics Prices paid and quantity consumed Public versus private goods Aggregate demand for public goods Tiebout hypothesis Externalities Positive and negative In production and in consumption The negative externality model The positive externality model Coase?s Theorem Taxes Quantity tax Incidence of the tax and elasticity Dead weight loss with tax Special cases with the incidence of the tax Uncertainty Expected value Risk aversion Risk premium The problem of Moral Hazard The problem of Adverse Selection