Demand & Supply
- Two players in the market
Consumers : Max utility (S.T budget constraint)
Producers : Max profits (S.T Cconsumer demand input cost)
- The fundamental questions of economics
What to produce?
How to produce?
Between Monopoly and
Perfect competition: many firms, identical
Monopoly: one firm
In between these extremes: imperfect competit
Costs of Production
What is a production function? What is marginal
product? How are they related?
What are the various costs, and how are they
related to each other and to output?
How are costs different in the short run vs.
the long run?
Chapter 2 Thinking Like an Economist
1. Economist as a Scientist
a. Devise theories
b. Collect data to test the theories
c. Analyze these data to verify or refute theories
2. Scientific method
a. dispassionate development and testing of theories about how
Chapter 7 Consumers, Producers and Efficiency of Markets
1. Consumer surplus and producer surplus
a. This surplus is not the same as the surplus related to demand and supply
b. Surplus is a measure of consumers welfare/efficiency
c. Consumer plus producer
Chapter 5 Elasticity and its Applications
a. How much do people change their consumption when price changes
b. How much does quantity demand change given a change in percentage of the
c. Different demand curves show different responsiv
Chapter 1 Ten Principles of Economics
1. How people make decisions
i. In every decision that you make
ii. have limited resources
iii. Giving up something in order to gain something
1. Giving up time to study economics
2. Spending an extra dol
Chapter 3 Interdependence and Gains from Trade
a. People have certain abilities to make certain goods and services
b. If people were limited to their own abilities and had no trade, they would only be
able to consume what they can make
c. Trade a
Chapter 4 Demand and Supply
a. Buyers: People who want and have the ability to buy goods and services from
b. Demand and Suppliers
c. Unless told that it is an imperfect market, assume it is a perfect market
i. Perfect market lots of bu
Factors of Production and Factor
Factors of production: the inputs used to
produce goods and services.
Capital: the equipment and structures used
to produce goods and services.
Prices and quantities of these inputs are
Class Exercise Cost of Production
True or False
1. The difference between economic profit and accounting profit is that economic profit is
calculated based on both implicit and explicit costs whereas accounting profit is calculated
based on explicit costs
Professional Level Options Module, Paper P7 (SGP)
Advanced Audit and Assurance (Singapore)
June 2014 Answers
To: Joss Dylan
From: Audit manager
Regarding: Audit planning for the Adams Group
These briefing notes are pr
Professional Level Options Module, Paper P7 (MYS)
Advanced Audit Assurance (Malaysia)
June 2011 Answers
To: Audit partner
From: Audit manager
Regarding: Audit planning of Bill Co
These briefing notes contain two s
Why do monopolies arise?
Why is MR < P for a
How do monopolies choose
their P and Q?
How do monopolies affect
What can the government do
What is price discrimination?
Chapter 6 Supply Demand and Government Policies
1. When government is involved no longer free market
2. Price Controls of the government
a. Government comes in and says price cannot be higher/lower than a certain value
b. No automatic restoration of equil