ECN2802

Fall 2009 Review for Exam 1

Dr. Dao

· Opportunity cost

· Marginal changes

· Incentives

· Market economy

· Markets: prices

· Communism

· Invisible hand

· Government: Property rights

· Market failure

· Externalities

· Economic models

· Circular-flow diagram

· Factors of production

· Capital

· Production possibilities frontier: opportunity cost

· Shortages vs. surpluses

· Equilibrium

· Externalities: efficiency

· Standard of living

· Productivity

· Inflation

· Economists

· Competitive markets

· Perfect competition

· Normal goods

· Substitutes vs. Complements

· Expectations

· Market demand

· Demand curve