6/2 3/2 =CAin
Dr. Tony Ostrosky
March 19, 1999
Marginal revenue may be defined as the:
change in product price associated with the sale of one more unit of output.
change in average revenue associated with the sale of one more unit
Study Guide for Exam 1
The Principles of Economics (Chapter 1)
Know what Chapter 1 of your text is trying to say. Make sure you
understand each principle and economic question. In particular,
be able to pinpoint the tradeoff in an economic problem.
Dr. Tony Ostrosky
April 9, 1999
The plumbers union is a good example of:
how unions can simultaneously increase wage rates and employment by increasing
the demand for labor.
Consumer Preferences- Consumers? likes and dislikes about goods and services,
independent of price and income considerations.
Concept of Utility- The satisfaction a consumer gets from consuming goods and
services(unlike prices and quanit
Dr. Tony Ostrosky
Feb. 19, 1999
If the price of 1998/99 Redbird Reminders falls from $5 to $4 and, as a result, the quantity
demanded increases from 9 to 10, we can conclude that:
demand is inelastic.
demand is elastic
1. Wants are changeable and partially determined by society, and the degree of scarcity changes as the quantity of goods, services, and
usable resources changes with technology and human action that underlie production.
2. a. Should U.S. in
1. Show how a production possibility curve would shift if a society became more productive in its output of widgets but less productive in its
output of wadgets
Decrease wadgets increase widgets
2. Show how a production possibility curve w
1. a. State the law of demand.
Quantity demanded rises as price falls, other things constant. Quantity demanded falls as price rises, other things constant.
b. Why is price inversely related to quantity demanded?
Price is inversely related
1. In a market economy, what is the central coordinating mechanism?
The price mechanism.
2. In a centrally planned socialist economy, what is the central coordinating mechanism?
The central planners.
3. a. How does a market economy solve t
Firms can afford to raise prices without any worry of revenue loss when demand is
characterized as Elastic
Principle of Substitution
almost all goods have alternatives available, giving the consumers options.
Although the law of demand is a result of this
Economy is efficient if there are no ways to make any person better off without
making at least one other person worse off
The technical means of producing a good or service
Gains from Trade
people can get more from trading than they
Marginal decisions decisions about whether to do a bit more or a bit less of an activity
Marginal Analysis The study of such decisions ^
Comparative advantage the opportunity cost of production is lower for that individual
than for other people (e
Law of Increasing Costs
as you produce more of one good, its opportunity cost/unit goes up
Law of Diminishing Returns
Past a certain point, additional inputs will yield less and less additional outputs.
Price of a good in units of currency
consumers' likes/dislikes about goods/services that are independent of price
the satisfaction a consumer receives from consuming goods/services
The additional satisfaction a consumer receives from consuming
Vacation Nation Analysis
When the article, The Rising Cost of Riding Teacups was published in 2000, the
economy was a lot better off than it is now. There was a period of economic expansion
and consumers were more apt to tolerate higher prices, e
Marriage and Divorce: Changes and their Driving Factors
Domestic life in relation to former customs has notably changed in society over a reasonable
period of time. The scholarly article, Marriage and Divorce: Changes and their Driving Forces, a
Neoclassical Growth Model
explains the economic growth by capital accumulation, population growth,
and technical progress
Per capita production function
Shows relationship between real GDP/ capita and the capital stock/capita
Per capita growth curve
Demand exceeds Supply
Supply exceeds Demand
Price Elasticity of Demand
Responsiveness of quantity demanded of a good/service to a change in its price
Percentage change of Quantity Demanded/Percentage change in Price
If it equals 1, then i
Average Fixed Costs
Average Variable Costs
Average Total Costs
Change in TC/Change in Quantity=Change in VC/Change in Quantity
Features of Perfect Competition
Quiz 3 Study Guide
Economic Growth: Growth rate of real GDP shows the extent to which the total output
of the economy is increasing. Growth rate of real per capita GDP shows the extent to
which the economic well-being of the average person is
Quiz 4 Study Guide
Functions of Money
Medium of Exchange
Unit of Value
Standard of deferred payment
Store of value
Basic Types of Money
Commodity Money- whose value as a commodity is as great as its value as money
Fiat Money- Government created mone
PRINCIPLES OF ECONOMICS
Instructor: Christopher E. Mushrush
Office Hours: MW 8:45-9:45, T 12:30-2:00
And by Appointment
Homework Set 1
DO NOT TURN THIS IN! Use this to prepare for
Homework Quiz 1.
The quiz questions will be similar in nature to these
1. Answer questions a through d on the basis of the PPF
in Figure 2-2 of Chapter 2 of your text.
a. What explains
Price elacisty of demand
Predicting changes in quanity:
Cross price elacisty of demand
Income elacisty of demand
Price elacisty of supply
Rational Self Interest- the princle of voluntary exchange is based on the notion that people ac
Chapter 5: Production Technology and Cost
Economic Profit total revenue minus economic profit
=Total Revenue Economic Profit
Economic Cost the opportunity cost of the inputs used in the production process
=explicit cost + implicit cost
Tuesday3pm, 4pm, or 6pm
Wednesday 6pm or 9pm
Thursday 4pm or 8pm
Friday 5pm or 6pm
Saturday 11am or 5pm
1. What is the primary difference between accounting profit and economic profit? Which profit is
- Accounting Prof
NAME: Georgia Murphy
1. Define accounting and financial accounting. Identify some of the questions
that can be addressed with financial accounting information.
Accounting is identifying, measuring, recording, and communicating financial
What were learning:
CONCEPTS OF THIS CHAPTER:
Opportunity cost and marginal decision making
HOW TO DISTINGUISH BETWEEN:
Correlation and causation
Positive and negatives
What the characteristics of good ec
Study Guide for Exam 5
Savings and Finance
understand how household savings find their way to business firms.
know the difference between financial markets and financial intermediaries.
Financial market- A market in which people trade future claims
Study Guide for Exam 4
You should know what the subject is about: What are the sorts of issues and questions that are
classified as "macroeconomic"?
unemployment rates, and price indices, national income, output,
You should be able to define, understand, and calculate the following items:
total cost (as opportunity cost)
the total receipts of a firm from the sale of any given quantity of a
product. It can be calculated as the selling price of the