•
Predict the changes in prices and quantities, given changes in demand and/or supply.
•
Interpret and compute equilibrium price and quantity from graphs, and/or data.
Ch. 3: Supply,
Demand, and
Price: The Theory
Ch.4: Applications
of Supply and
Demand
Ch. 18: Elasticity

•
Interpret market conditions given novel data.
•
Define and explain the effects of price ceilings and price supports.
•
Define, explain, calculate, and interpret the price elasticity of demand.
•
Identify and interpret the relationship between the price elasticity of demand and the effect of
a price change on total revenue.
•
List and explain the determinants of price elasticity of demand.
•
Define, calculate, and interpret cross elasticities and income elasticities of demand.
•
Calculate and explain the price elasticity of supply.
•
Explain the burden of taxation given elasticity information
Topic #2 - Theory of Consumer Choice
1.
Total utility and marginal utility
2.
Utility maximization: equalizing marginal utility per dollar
3.
Individual and market demand curves
4.
Income and substitution effects
Performance Objectives
You must be able to:
•
Explain the theory of marginal utility and its relationship to demand.
•
Construct and interpret marginal utility schedules and curves.
•
Explain how a rational individual decides what to purchase, given necessary information about
utility, prices, and income.
•
Derive consumer demand schedules and curves, given necessary information about utility,
prices, and income.
Unit III – Production and Costs and Perfect Competition
Topic #1 - Production and Costs
1. Production functions: short and long run
2. Marginal product and diminishing returns
3. Short-run costs
4. Long-run costs and economies of scale
5. Cost minimizing input combination and productive efficiency
6. Accounting versus economic profits
7. Normal profit
Performance Objectives
You must be able to:
•
Define, explain, and calculate total product, marginal product, and average product, and
describe the relationship among these concepts.
•
Define and interpret production functions.
•
Define and differentiate between short run and long run and between fixed and variable inputs.
•
Define the law of diminishing returns and explain how it is depicted by the total product and
marginal product curves.
•
Explain the relationship between production and cost.
•
Define and differentiate between explicit and implicit costs.
•
Define and calculate cost graphs.
•
Calculate and define fixed, variable, average, marginal, and total costs, and explain how they
vary with the level of output in the short run and long run.
•
Define and explain economies and diseconomies of scale and constant returns to scale.
•
Define and calculate the least-cost combination of inputs to employ for an existing firm.

#### You've reached the end of your free preview.

Want to read all 7 pages?

- Spring '11
- Mohammad
- Economics, Supply And Demand, Define scarcity, Demand Model and Consumer Choice