Chapter 3: The Market at Work
What Determines Supply?

With supply, price level and quantity supplied are positively related
Quantity Supplied: amount of good or service that producers are willing and
able to sell at the current price
o Higher prices= su
ECON Exam 2 Study Guide
Chapters 4, 5, 6, 7
(Elasticity, Price Controls, Efficiency of
Markets and Cost of Taxation, Externalities)
Elasticity
Relationships Between Price Elasticity of
Demand and Price
What is the coefficient and interpretation of
each?
Econ 201 Class Notes
Wednesday 8/24/16
PPF Shows what we can produce
Opportunity cost
 Highest valued item/ thing that we have to give up
PPF and opportunity cost (nonlinear ppfs)
 The more we give up of something, the more we can get of something else
1
Chapter 5  Basics of Probability
Most business decisions are made under conditions of uncertainty. In fact, this is also
true for most decisions we make in our own lives. Whether we are deciding how much
to study for a test, whether to bring an umbrell
Chapter 6 Discrete Probability Distributions
We now extend the concepts and principles of basic probability to Probability Models.
Probability Models represent specic patterns of probability and shapes of probability
distributions.
First we turn to a gene
Chapter 8 Sampling and Sampling Distributions
Most statistical analysis is conducted using sample data. Our task in this module is to learn
about sample data and how we can apply probability models to sample data. We will develop
what is formally called t
Terminology, Concepts, and Symbols for Chapters 58
You should learn these as we go through each chapter. If you leave them all for just before the
exam, you will likely be in trouble on exam day. There are too many of the terms, concepts, and
symbols to
EXAM 2
1. Demandissaidtobeinelasticif
a.
b.
c.
d.
thepriceofthegoodrespondssubstantiallytochangesindemand.
thequantitydemandedrespondssubstantiallytochangesinthepriceofthegood.
buyersdontrespondmuchtochangesinthepriceofthegood.
demandshiftssubstantiallywh
Exam 3:
1. Total cost necessarily equals
a.
b.
c.
d.
total output multiplied by the average cost of output.
total output multiplied by sales price of output.
(total output multiplied by sales price) inventory surplus.
(total output multiplied by the avera
Exam 2 Review ECON 225
Figure out what type of problem you have before you begin. All Chapter 7&8 have
Standard Deviation and Mean given to you in order for you to find your Z score
Guaranteed a Central Limit Theorem question on this exam
Look through all
Economics 225
Fall 2013
Printed Name:
Second Exam
Directions: Answer all questions.
Part A  Multiple Choice (4 points apiece): Choose the one best answer. Fill in the appropriate letter on the
scantron form.
Questions from Exam 1 of Fall 2013
2. Each sal
Chapter 3
Numerical Measures
Key Summary Measures
The location or central tendency is the extent to
which all the data values group around a typical
or central value: mean, median, and mode
The dispersion is the amount of variation, or
scattering, of va
Appendix B: Tables
B.1 Areas under the Normal Curve
Example:
If z = 1.96, then
P(0 to z) = 0.4750.
0.4750
z
0
1.96
z
0.00
0.01
0.02
0.03
0.04
0.05
0.06
0.07
0.08
0.09
0.0
0.1
0.2
0.3
0.4
0.0000
0.0398
0.0793
0.1179
0.1554
0.0040
0.0438
0.0832
0.1217
0.159
Sample Space for 3 Flips of a Coin
Trial (ip of coin)
First Second Third
n H H H
1) H H T
33 H T H
L0 T H H
5) H T T
Q T H T
73 T T H
5) T T T
DeC we (Succesa) as StaHMS Hawk
P<0 kEQg PA 3 19" '5") P(\Smc 6695: :n 3+? 10:19)
Prekmio iti'f 0'? H on (my
Appendix B ~
B.9 Binomial Probability Distribution
n = 1
Prbability
0.600
0.400
0.500
0.500
n = 2
Probability
0.360 0.250 0.160 0.090 0.040 0.010 0.003
0.095 0.130 0.320 0.420 0.480 0.500
0.160 0.250
n = 3
Probability
n =
PGEQALLJC'wWMFiSEEEMQISJTFIxhvJkt0W9 L: XLU 34? a Die
I~ PUB.JOATEOA 0:547 5.1%quth 0? O%+C0Me 4:39" WV 1 W
O u+com Q 1 1 :5 u S G
P Coutkcowm> : cfw_/6 I 4% X6 I % % Kg
P6<> , _
(/9. (h (go f M
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t L '5 La 9 g "3 _
if E @Q :. EX cfw_
Chapter 4
Additional Methods for Displaying and Exploring
Data
Measures of Relative Position:
A measure of relative position tells where data
values fall within the ordered set. Somewhat of a
hybrid that tells us something about location as
well as about
II. Tables and Charts for Quantitative Data
A. Frequency Distribution
A frequency distribution divides quantitative data into classes and indicates the number (frequency) of
observations or amount in each class.
Unlike with categorical data, the classes (
Continuous Probability Distributions
A continuous random variable is a variable that
can assume any value on a continuum (can
assume an uncountable number of values)
thickness of an item
time required to complete a task
temperature of a solution
height, i
Economics 225, Spring 2014, Brian Cushing
Assignments for Second Exam: Chapters 5 through 8
At a minimum, do the reading, as well as all Connect and Excel assignments. The Connect and Excel
assignments count toward your course grade.
Each Connect assignme
Economics 225, Spring 2014, Brian Cushing
Assignments for First Exam: Chapters 1 through 4
At a minimum, do the reading, as well as all Connect and Excel assignments. The Connect and Excel
assignments count toward your course grade. I am listing other pro
Types of Probability Problems in Ch. 5
I. Probabilities related to just doing something one time (one trial). These are basic and should generally be
straightforward
a) Marginal Probability: P(A) Probability of an outcome with a single characteristic
Exam
Types of Probability Problems in Ch. 5
I. Probabilities related to just doing something one time (one trial). These are basic and should generally be
straightforward
a) Marginal Probability: P(A) Probability of an outcome with a single characteristic
Exam
Continuous Probability Distribution
A continuous random variable is a variable that can assume any value on a continuum
(can assume and uncountable number of values)
o Thickness of an item
o Time required to complete a task
The Normal Distribution
1. Bel
ECON 225
Section 2
Chapter 5: Probability
A probability is a measure of the likelihood that an event will happen
Relative change that an uncertain event will occur
Expected relative frequency of an event in the long run (many trials)
Basic Concepts:
Ra
Birthday Problem
In class, 61 students responded to the birth date survey (month and date of birth).
What is the probability that at least two of the 61 who responded have the same birthday (month and day)? Note
that we are ignoring leap years and assumin
Economics 201 Exam 2 Review
Price Elasticity of Demand
The formula for the price elasticity of demand is
% change in quantity demanded / % change in price
If elasticity > 1 then % change in demand > % change in price = elastic
If elasticity < 1 then %