Econ Final Review

Econ Final Review - MicroEcon Final Review Positive...

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MicroEcon Final Review Positive statements are descriptive, normal statements are prescriptive. Absolute advantage- the ability to produce a good using fewer inputs than another producer Comparative advantage- the ability to produce a good at a lower opportunity cost than another producer Change in the price of the good itself causes a movement along the demand curve; income, prices of related goods, tastes, expectations, and numbers of buyers shift the demand curve. Change in the price of the good=movement along the supply curve; input prices, tech, expectations, and numbers of sellers shift the supply curve. Price Elasticity of Demand= (%Change in quantity demanded/(%Change in Price) Midpoint method= ((Q2-Q1)/((Q2+Q1)/2))/((P2-P1)/((P2+P1)/2)) Perfectly inelastic is vertical line, perfectly elastic is horizontal Price elasticity of supply= %Change in quantity supplied/%Change in price A binding price ceiling causes a shortage, a binding price floor causes a surplus
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This note was uploaded on 10/17/2011 for the course ECON 220:102 taught by Professor Rubin during the Fall '11 term at Rutgers.

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Econ Final Review - MicroEcon Final Review Positive...

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