review 1 - externalities change in quantity demanded free...

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Econ 162B-A0, A1 Kenny Christianson Fall 2009 exam date: October 16 REVIEW SHEET FOR MIDTERM ONE Concepts to know for midterm: economics complements scarcity substitutes choice determinants of demand technology determinants of supply resources equilibrium microeconomics shortage macroeconomics surplus positive economics price floor normative economics price ceiling economic good transaction costs free good private and public sectors models socialism ceteris paribus capitalism opportunity cost centrally-planned economy production possibility curve traditional economies specialization four basic economic questions comparative advantage consumer sovereignty terms of trade mercantilism consumption possibility curve laissez-faire market resource allocation supply Adam Smith demand public goods change in demand
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Unformatted text preview: externalities change in quantity demanded free trade change in supply fair trade change in quantity supplied globalization rational self-interest WTO/GATT, NAFTA credit crisis mortgage-backed securities sub-prime lending predatory lending important ideas to remember: 1. comparative advantage: specialize where opportunity costs are lowest. 2. production possibilities curves: slope and concavity 3. demand and supply: finding equilibrium (graphically and algebraically). 4. Price floors lead to surpluses when the mandated price is above the equilibrium price. 5. Price ceilings lead to shortages when the mandated price is below the equilibrium price. 6. study your notes and the problem sets. 7. RELAX!...
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