Final_Review

Final_Review - Reviewing Key Concepts for the Final Exam...

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Reviewing Key Concepts for the Final Exam Chapter 1-6: We will have only five multiple choice questions and no short question from these chapters. Make sure you review the sample MCQs and the midterm exam well to prepare for this section. For the rest of the chapters review properly the sample MCQ and the short questions and make sure you understand the following concepts properly to solve and answer related short answer questions and the MCQs. Chapter 7 1. Define explicit costs, implicit costs, and the three types of profit. 2. Explain how economic profits/losses motivate firm behaviour. 3. Define long-run average cost (LRAC). 4. Explain how a perfectly competitive industry attains long-run equilibrium. 5. Derive the long-run market supply curve for a perfectly competitive industry. 6. Define scale, economies of scale, constant returns to scale, diseconomies of scale, and minimum efficient quantity. 7. Define indivisible factor of production and indivisible costs and explain the relationship with economies of scale. 8. Define the two functions of prices in competitive markets and explain the invisible hand theory. 9. Explain the importance of free entry and exit and define barriers to entry. 10. Differentiate between economic profits and economic rent. 11. Understand incentive for cost-saving innovations. 12. Understand role of invisible hand in regulated markets and policy-making. 13. Understand relationship between market equilibrium and incentives.
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Final_Review - Reviewing Key Concepts for the Final Exam...

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