Econ 2010 Fall 2015 Exam Two Practice Midterm
1. Refer to Table 7-1. If the price of the product is $110, then who would be willing to purchase the
b. Calvin and Sam
c. Calvin, Sam, and Andrew
d. Calvin, Sam, Andrew, and Lori
Econ 2020 Homework 5
Homework assignments are optional there is no penalty for not completing an
If you like, you can work with other students in the class. Just turn in one assignment
per group and
absolute advantage - the ability of an individual or group to carry out a particular economic
activity more efficiently than another individual or group.
Bob has the absolute advantage in production of burgers, vise versa
o Advantage isn
Gains from trade
Production possibilities frontier
There are trade offsif it was nonlinear there would be a curve
o Able to be produced with the given resources
o On PPF graph, any point inside or along that l
Kanye drinks miller lite at VMA, also shortage of wheat.
Shifts supply inwards
Equilibrium price rises
Reasoning for equilibrium
Clicker quiz #2
Compliment prices rises
Demand goes left
Sub price decreases
really steep = price doesnt matter
flat = price sensitive
small change in price, huge change in quantity
mostly straight lines, sometimes bow in and bow out
things that benefit when they are to
Demand: relationship between price and quanity willing
and able to be purchased by buyers
Quantity demanded: # of units
Microeconomics Chapter 6: Elasticity
Consumers of the flu shot vaccine were relatively unresponsive to price (still willing to buy even
with large price increases), while consumers of goods like cereal are more responsive (wont buy
with significant price
Microeconomics Chapter 14: Oligopoly
The Prevalence of Oligopoly: An oligopoly is an industry with only a few sellers. Each of these
firms has some market power. This is imperfect competition. Oligopoly is the result of the same
factors that sometimes pro
Microeconomics Chapter 7: Taxes
Taxes are necessary because governments need money to function. However, making tax policy
is not easy, but it is guided by efficiency and fairness.
The Economics of Taxes: A Preliminary View: An excise tax is a tax charged
Microeconomics Chapter 8: International Trade
Comparative Advantage and International Trade: Imports are goods or services purchased in
another country, and exports are goods and services sold to other countries. Ways in which
countries interact economica
Microeconomics Chapter 12: Perfect Competition and the Supply Curve
For organic foods, the supply curve was inelastic in the short run, but as supply grew, the line
becomes more elastic in the long run.
Perfect Competition: Yves and Zoe, two tomato farmer
Microeconomics Chapter 3: Supply and Demand
Market: a group of producers and consumers who exchange a good or service for payment.
Competitive Market: Many buyers and sellers or the same good or service.
Supply and Demand Model has 5 key elements: the dem
Microeconomics Chapter 1
All economic analysis is based on a set of common principles that apply to many different issues.
Individual Choice making a choice from among a limited number of alternatives.
Economic Interaction How my choices affect your choic
Microeconomics Chapter 15: Monopolistic Competition and Product Differentiation
The Meaning of Monopolistic Competition: Monopolistic competition is a market structure in
which there are many competing producers in an industry, each producer sells a diffe
Microeconomics Chapter 13: Monopoly
Types of Market Structure: There are four types of market structure, perfect competition,
monopoly, oligopoly, and monopolistic competition. This is based on the number of producers in
the market, and whether the goods
Microeconomics - Chapter 2
Most graphs in economics depict the relationship between two economic variables. A variable is
a quantity that can take on more than one value.
Most economic models describe the relationship between two variables, simplified by
Chapter 11: Behind the Supply Curve: Inputs and Costs
The relationship between a firms inputs and outputs (production function) determines its cost
curves, the relationship between cost and quantity of output produced.
The Production Function:
Microeconomics Chapter 10: The Rational Consumer
Economists work with a model of a rational consumer a consumer who knows what he or she
wants and makes the most of the available opportunities.
Utility: Getting Satisfaction: The consumers utility is used
Microeconomics Chapter 5: Price Controls and Quotas: Meddling with Markets
Why Governments Control Prices
The equilibrium price doesnt always please buyers or sellers, so a government might be
under pressure to impose limits.
When a government intervenes
Microeconomics Chapter 4: Consumer and Producer Surplus
Consumer Surplus and the Demand Curve:
A potential buyers willingness to pay is dependent upon the price of a good. The net gain that a
buyer achieves from the purchase of a good is called that buyer
Microeconomics Chapter 10 Appendix: Consumer Preferences and Consumer Choice
Different consumption bundles can yield the same utility for a person, this can be represented by
indifference curves. Total utility depends on income and prices.
Mapping the Uti
Microeconomics Chapter 9: Decision Making by Individuals and Firms
Which decision will result in the optimal outcome?
Costs, Benefits, and Profits: Recognize the role of opportunity cost, which arise because
resources are scarce. Explicit costs and implic
Fall, 2016 Final Exam
On your bubble sheet, be sure to enter your name, student id, and version.
Consider the following discrete bivariate probability distribution. Answer the next
Chapter 16: The Monetary System
Double coincidence of wants: unlikely occurrence that two people each have a good or service
that the other wants.
Money: the set of assets in the economy that people regularly use to buy goods and services
from each other.
NCO > 0, net outflow of capital, net purchase of capital overseas adds to demand for
domestically generated loanable funds. NCO < 0, country experiencing net inflow of capital,
capital resources from abroad reduces demand for domestically gener
Net exports= Exports Imports
-Trade balance: value of nations exports minus value of imports
Trade surplus: excess of exports to imports
Trade deficit: excess of imports over exports
Balanced trade: situation in which exports equal imports
Recession: a period of declining real incomes and rising unemployment
Depression: severe recession
The business cycle: fluctuations in the economy (irregular)
-When conditions deteriorate much of the decline is attributable to reduction in
Financial system: Consists of the institutions that help to match one persons saving with
another persons investment.
Financial market: institutions through with a person who wants to save can directly supply
funds to a person who wants to borr
P= the price level (e.g., the CPI or GDP deflator)
P is the price of a basket of goods, measured in money
1/P is the value of $1, measured in goods
Ex. Basket contains one espresso; if P = $2, value of $1 is espresso
-Inflation drives up prices