Course Outline Review Sheet

Course Outline Review Sheet - Each week's lectures are...

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Course Outline and Review Sheet Each week’s lectures are summarized by the following core ideas.  Also listed are key terms (to help learn the vocabulary  of economics) and weekly  P ROBLEM S ETS  that consist of end-of-chapter  P ROBLEMS AND A PPLICATIONS from the  textbook (note these are not the end-of-chapter  R EVIEW Q UESTIONS ).  You should be able to solve these questions after  listening to lectures and reading the text each week.   Answering these questions will prepare you for the kinds of  questions you will see on exams and quizzes. Week 1 Scarcity:  People face trade-offs because resources are limited. Benefit-Cost: Choosing one alternative over another generates both costs and benefits. Marginal Analysis: Rational people make “how much” decisions at the margin. Incentive:  People make decisions by comparing costs and benefits; they respond to incentives. KEY TERMS:   opportunity cost, productive efficiency, allocative efficiency, rationality, equity, marginal cost,  marginal benefit, sunk cost Week 1 PROBLEM SET:   Chapter 1 – Problems 5,6,8,14, Chapter 1 Appendix – Problems 2,3,4,5,6 Week 2 Production Possibilities Frontier: An economic model to deepen understanding of some of the basic  principles developed last week. Gains from Trade: Improvements in income, production or satisfaction owing to the exchange of goods or  services. Market System: The free determination of prices and the free exchange of goods and services characterize a  market economy; normally markets are a good way to organize economic activity. KEY TERMS:  opportunity cost, equity, comparative advantage, efficient, absolute advantage, inefficient,  property rights Week 2 PROBLEM SET: Chapter 2 –  Problems 1,4,5,11,12,14 Week 3 Demand and Supply Model: This model explains why the interaction between the cost of production and  the value to the buyer are important in understanding market activity. Market Equilibrium:   The intersection of the supply and demand curves determines the equilibrium.  Markets  generally move toward equilibrium where there are no unexploited opportunities for individuals. Changes in Market Conditions: Shortages or surpluses occur when demand and/or supply change, thus  causing a change in the equilibrium price and equilibrium quantity.  KEY TERMS:  demand curve, supply curve, equilibrium, competitive market, substitutes, complements Week 3 PROBLEM SET: Chapter 3 – Problems 11,12,14,20,21,23
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Week 4 Social Welfare or Economic Well-Being: To evaluate the efficiency of competitive markets or in order  to analyze the effect of policy alternatives the benefits to market participants (consumers and producers) are 
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This note was uploaded on 04/29/2008 for the course ECON 0100 taught by Professor Kenkel during the Spring '08 term at Pittsburgh.

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Course Outline Review Sheet - Each week's lectures are...

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