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Unformatted text preview: only way we can follow? 4. The concept of comparative advantage and the difference with the absolute advantage. Chapter 4 is all about the Phillips Curve. Its a difficult chapter and requires you to read it and study over and over in order to fully master it. The essential points you have to know are: 1. The definition and construction of the demand curve. Why is the slope negative? 2. The definition and construction of the supply curve. Why is the slope positive? 3. Difference between demand/supply curve and quantity demanded/supplied. Difference between movements of the curve and movements along the curve. 4. The concept of Supply/Demand equilibrium. The equilibrium price and the equilibrium quantity. Shifts of the curves and effects on the equilibrium. 5. Price ceilings and price floors: what they are, how they work, their implications for the equilibrium quantity and price....
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- Spring '11