Microeconomics (semester summary)

Microeconomics (semester summary) - Microeconomics Study...

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Microeconomics – Study Guide Chapter One- The discipline of economics is mainly concerned with ordinary things. The market – processes whereby buyers and sellers transact business. Mixed market economy. Voluntary exchange; government included. Self – interest –Adam Smith – The invisible hand. Scarce resources, opportunity cost, marginal decisions, interaction, efficient use of resources, market equilibrium. Chapter Two- Models: Ceteris Paribus: holding other things constant, except price. Answers ‘what if’ questions. Substitutes and complements. Self interest and informed decisions. Efficiency, economic growth, comparative advantage, opportunity costs, tradeoffs. Production possibilities frontier. Shifts in the PPF curve. Circular flow of economy between firms and households. Marginal analysis Factors of production. : Demand curve and the ‘law of demand’. Supply curve and the ‘law of supply’. What factor (s) cause only movement along a given curve versus shifts in the curve. Price change only = movement along same curve. All else = shift to a new curve. Movement results only in a change in quantity demanded or quantity supplied. Shift is change in demand or supply curve. The only thing that can cause the entire curve to shift is a change in a determinant other than price. Price change impacts for substitutes and complements. Factors of production. Equilibrium. Price is the market’s automatic regulator. Chapter Four- Purchases yield a net benefit to the consumer and to the producer.
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Microeconomics (semester summary) - Microeconomics Study...

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