Review_Sheet_for_Exam_1 - ReviewSheetforExam1

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Review Sheet for Exam 1 Your exam is 30 multiple choice questions worth 2 points each and 2 short answer   questions worth 20 points each.  The exam is worth a total of 100 points. Ch. 1 Know the difference between micro and macro economics: what sorts of things  do microeconomists study?  What sorts of things to macroeconomists study? Understand the ideas of rationality, self-interest and incentives What are economic models and what role do assumptions play in models? Know the difference between positive and normative economics Ch. 2 What is scarcity? What are the factors of production? What is opportunity cost? What are trade-offs? Production possibilities curves (PPC):  understand the PPC graph, know the  assumptions underlying the PPC.  Know how to measure opportunity cost from   the PPC graph or the PPC schedule . What is the difference between a straight line and a bowed out PPC?   How can the PPC be used to show economic growth? The PPC will shift outward if there are increases in resources, capital,  improvements in technology or if labor becomes more productive. Understand the trade-off between current and future consumption. What is the difference between a capital good and a consumption good? What is absolute advantage?  Comparative advantage?  Which of the two is used  to determine trade decisions? Ch. 3 Law of demand Understand the demand schedule and the demand graph The difference between individual and market demand curves What shifts demand?  You can expect at least one question for which you will 
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This note was uploaded on 10/08/2010 for the course ECON 002 taught by Professor Mcleod,markpehlivan,ayseozg during the Summer '08 term at Pennsylvania State University, University Park.

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Review_Sheet_for_Exam_1 - ReviewSheetforExam1

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