We will cover these units in the order presented

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Unformatted text preview: order presented below. You c a n f ind these top i cs in a ny p r i n c i p l e s o f m i c r o e c onom i c s t e x t boo k . U n i t 1 : W h a t i s e c o n o m i c s? Scarcity Opportunity cost Positive vs. normative analysis Marginal analysis Comparing marginal costs and benefits vs. comparing total costs and benefits Micro vs. Macro Economics Efficiency U n i t 2 : A l loc a t i ng sc a r c e r eso u r c es Budget line model How to draw it. Slope reflects opportunity cost. Shifting (change income, change in one or both prices) Production possibilities frontier model Why this shape? What does the shape mean about opportunity cost? Shifting the PPF (changes in technology, availability of resources, quality of resources) Trade, comparative advantage and the PPF The law of increasing opportunity costs The principle of comparative advantage U n i t 3 : T h e f u n c t io n i ng o f ma r k e t s a n d p r i c e d e t e r mi n a t io n Demand (the law of, curve, and schedule) and Determinants of demand (= demand shifters) Quantity demanded and changes in quantity demanded Supply (the law of, curve, and schedule) and the determinants of supply (= supply shifters) Quantity supplied and changes in quantity supplied Equilibrium Where does the equilibrium price (P*) come from? Shortages and Surpluses How changes in one market can affect another market? Using individual demand curves to construct the market demand curve. Normal vs. inferior goods Price floors Price ceilings U n i t 4 : U n d e r st a n d i ng c h a nges i n p r i c es a n d q u a n t i t i es : E l a st i c i t y The price elasticity of demand elastic vs. inelastic D determinants of elasticity changes in elasticity along D curve measuring elasticity between 2 points on a D curve (midpoint formula) changes in revenue from price changes The income elasticity of demand The cross-price elasticity of demand The elasticity of supply U n i t 5 : C o n su me r T h eo r y Preferences and the budget line revisited utility (marginal vs. total ) law of diminishing margin...
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