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1.
Know how to do the problems on the last Test that were not counted
before. These include calculating price elasticity, consumer surplus, and
deadweight loss in a basic supply and demand environment.
2.
Know the formulas for the different elasticities (price, income, and cross)
and how to calculate them.
3.
Know how to tell if a good is elastic or not by doing the total revenue test
and also the formula for elasticity. if price and total revenue move in the
same direction, (i.e. if price increases TR increases) then we have an
inelastic good. if price and TR move in opposite directions we have an
elastic good. if price increases but revenue does not change, we have a
unit elastic good. Know what it means to be an elastic/inelastic good.
4.
Know how to tell if goods are complements or substitutes from computing
their cross elasticities, and if goods are inferior or normal by the income
elasticities
5.
Read Sections 6.1 - 6.4 in the book and know the basic definitions
6.
Definition of black market and search activity
7.
Be able to draw a picture/graph of a price ceiling and price floor and

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