ECN2802

Fall 2016 Review for Exam 1

Dr. Dao

· Central Coordination Problems

· Methods of Reasoning in Modern Economics

· Marginal Analysis

· Microeconomics vs. Macroeconomics

· Rational Decision Making

· Positive vs. Normative Statement

· Marginal Benefit and Marginal Cost

· Law of Comparative Advantage

· Opportunity Cost

· Comparative Advantage

· Specialization and Exchange

· Economic Force

· Market Force

· Market disequilibrium scenarios: Shortage (Excess Demand) and Surplus (Excess Supply)

· Equilibrium Price and Quantity

· Division of Labor and Gains from Specialization

· Efficiency and Production Possibilities Curve

· Inefficient and Unattainable Production

· Shape of Production Possibilities Curve

· Shifts of the Production Possibilities Curve

· Principle of Increasing Marginal Opportunity Cost

· Economic Model

· Law of demand

· Demand Schedule and Demand Curve

· Change in Quantity Demanded (Movement Along the same Demand Curve) vs. Change in Demand (Shift of Demand Curve)

· Shift Factors Affecting Demand

· Law of supply

· Shift Factors Affecting Supply

· Effects of Demand and/or Supply Shifts on Equilibrium Price and Quantity

· Adam Smith and Self-Interest