ECO 2013 Fall 2003
Some Review Tips for the Final
Your final is in Fisher Lecture Hall [downstairs] on Monday 8 December at 3 p.m.;
last names begin with A through L in 255 FLH,
those with last names beginning with M through Z in
, in both cases
It will be a multiple-choice exam of 80 questions.
There will be more stress on the last two chapters,
19 and 20, that were not tested earlier, than on other material [of the order of say 7 to 10 questions
directly relevant to those chapters, as opposed to at most 3 or 4 (in some cases much fewer) directly
relevant to other chapters].
Remember, the material is cumulative, so if you are comfortable with the
later material you are probably OK with most of the earlier.
Don’t panic or be overly nervous; most of
you will do better than you expect, you know more than you think you do.
I will do a review on Sunday 7 December 3.00 p.m. in room BEL 0102.
The best preparation for the exam is the practice multiple choice tests in the Study Guide and the
or MyEconLab website.
Things you should know:
Key points from the first four chapters:
Difference between MACRO and MICRO economics and examples
Concept of scarcity and how economics is about scarcity and its implications
The business cycle and its parts, what is happening to output and employment in the different
Positive versus Normative statements
Graphs and the slope of a line in a graph
GDP as C + I + G + (X – M), definitions of each and relative sizes
The circular flow and the components of it, what the flows are
PPF, Production Possibility Frontier: idea of attainable and non-attainable, increasing
opportunity cost on curved PPF’s, opportunity cost as slope of the PPF, how economic growth
shows in the diagram; how international trade allows
at a point
Opportunity cost; comparative advantage means low opportunity cost producer [you have
comparative advantage in an activity if your opportunity cost of it – what you have to give up of
the other thing -- is lower than others’ opportunity cost of it]
Supply and Demand, reason for slopes, shifts in them, idea of equilibrium
Distinction between a
in Supply or Demand [shift of the curve, because something other
than the own-price of the good changed] and movement on a curve [change in
, because the price changed]
How to take a change in something other than the own-price and quantity of a good and
interpret it as a shift in either Supply or Demand and make a prediction about what will happen
to price and/or quantity [direction of change, if any, only]
Complements and substitutes in consumption and production, implications
Normal goods and inferior goods; how income change affects demand
Final goods versus intermediates
GDP; output = income = expenditure.
Gross includes depreciation, Net subtracts
GDP = C + I + G + (X – M).
Measuring by expenditure and by income.