exam1review

exam1review - ECON 251 Exam#1 Review Chapter 1 • • •...

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ECON 251 Exam #1 Review
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Chapter 1 Definition of economics Scarcity Opportunity cost Sunk costs Marginal costs and benefits
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Chapter 2 Comparative Advantage = low-cost producer Absolute Advantage PPF's magnitude of the slope = MC of producing the good on the x axis, slope is always negative what shifts the PPF Productive efficiency
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Chapter 3 Law of demand What shifts demand? (shift to right = increase; shift to left = decrease) Income (normal or inferior?) Prices of related goods (substitutes or complements in consumption?) Tastes and preferences # buyers Expectations about prices or income Law of supply What shifts supply? (shift to right = increase; shift to left = decrease) Prices of inputs Prices of related goods (substitutes and complements in production) # Sellers Expectations about price Taxes (mostly in Chapter 6) Technological changes Equilibrium (practice shifting S and D to see what effect there is on
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This note was uploaded on 04/07/2008 for the course ECON 251 taught by Professor Blanchard during the Spring '08 term at Purdue.

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exam1review - ECON 251 Exam#1 Review Chapter 1 • • •...

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