ECN2802

Spring 2014

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