Econ Exam 1 Review

Econ Exam 1 Review - Exam #1: Topics and frequency (in...

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Exam #1: Topics and frequency (in parenthesis) for the exam: These topics are meant as a rough guide to the exam content and not as an exhaustive description of the questions that will appear. You should use this review to ensure that you have not overlooked an important topic. Adam Smith – People act out of self-interest. Animal bartering game – Everyone has a comparative advantage. Some animals are easier to obtain over others. Auctions - English Auctions vs. Dutch Auctions English auctions start at a low price and are bid upon until the highest price is reached by a buyer. Dutch Auctions start at a high price and gradually decrease in value until a bid is placed. Demand and supply together (2) - Excess supply – Occurs when the amount supplied exceeds the amount demanded. Factors that shift supply – Improvement in technology, increase/decrease cost of resources, natural disasters. Production Possibilities Curve (2) – Graphical illustration of alternative combinations of goods and services that an economy can produce. Curve is bowed outward because of law of increasing relative cost Rationing mechanisms - Market equilibrium (2) – The price where supply meets demand. Price floor
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Econ Exam 1 Review - Exam #1: Topics and frequency (in...

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