Review Exam 1 Chapter 2 • What role does scarcity play in economics? • Understand what is meant by tradeoffs • Understand how economics is a science and the importance of assumptions • Understand the basics of the circular flow diagram • Understand what the ppc shows and what concepts it illustrates. • What is the normal shape of the ppc and why is it shaped the way it is? • Distinguish between points inside ppc, points on and points outside ppc. • What factors would cause a shift in the ppc both in and out? • Macroeconomics vs. Microeconomics • Positive vs. Normal economics and the art of economics Chapter 4 -Supply and Demand: • Understand what is meant by a competitive market • Understand relation between Price and Quantity Demanded and Quantity supplied. Understand the difference between a movement along the curve and a shift in the curves. • Understand the difference between an individual curve and a market curve • Know and understand the different factors that shift both demand and supply. • Understand what is meant by equilibrium and why it is that the market always
This is the end of the preview. Sign up
access the rest of the document.