ECON 202- Exam 2 Study Guide

ECON 202- Exam 2 Study Guide - Study Guide for Exam 2...

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Study Guide for Exam 2 Chapter 1 Understand the concept of scarcity and how it relates to choices and economics The 8 guideposts to economics Positive vs. Normative Economics The 4 pitfalls to avoid in Economic Thinking Chapter 2 The 4 incentives of property rights The Production Possibilities Curve 1. The basic idea and assumptions of the production possibilities curve. 2. If we are operating efficiently, producing more of one good means producing less of another. 3. What is being produced at a certain point and what is gained or given up when moving from one point to another. 4. Know the difference between efficient, inefficient, and unattainable points 5. Know what shifts the production possibilities curve Understand the Law of Comparative Advantage Know the 3 questions every economy must answer Know the difference between Capitalism and Socialism and why market organization is more efficient than central planning (collective decision making) Mises’ Impossibility Critique Chapter 3 The Demand Curve 1. The Law of Demand 2. The difference between a change in demand and a change in quantity demanded 3. Shifters of the demand curve Consumer surplus The Supply Curve 1. The law of supply
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ECON 202- Exam 2 Study Guide - Study Guide for Exam 2...

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