Review Sheet 2

Review Sheet 2 - 1. Know how to do the problems on the last...

Info iconThis preview shows pages 1–2. Sign up to view the full content.

View Full Document Right Arrow Icon
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
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 2
This is the end of the preview. Sign up to access the rest of the document.

Page1 / 4

Review Sheet 2 - 1. Know how to do the problems on the last...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online