ECO 2030. Principles of Economics-Price Theory

Exam #3 Study Guide

Cumulative Material

Chapter 1

Chapter 4

  • Key Concepts: law of demand, demand shifts (tastes, income, prices of related goods, number of consumers), law of supply, supply shifts (input costs, technology, number of firms); shifts of demand and supply

New Material

Chapter 8

  • Key words: burden of a tax (i.e., who pays?), effects of a tax on market price and quantity, deadweight loss, deadweight loss and demand elasticity, taxation and welfare (i.e., changes in consumer and producer surplus)
  • Problems and applications (p. 173): #1 (a, b)
  • Answer Key (PDF)

Chapter 9

  • Key words: comparative advantage, winners and losers from trade, gains from trade, trade and welfare, tariffs, quotas, protectionism and welfare
  • Problems and applications (pp. 196-197): #1, #4
  • Answer Key (PDF)

Chapter 18

  • Key words: labor demand (marginal product of labor, diminishing marginal product, value of the marginal product), labor supply, (labor-leisure tradeoff), supply elasticity and tax incidence

Chapter 10

Chapter 11

Chapter 13

Chapter 14

  • Key Concepts: competitive market, price taker, marginal revenue, shut down decision, short run equilibrium, long run equilibrium, efficiency, free entry and exit

Chapter 15

  • Key Concepts: monopoly, barriers to entry, price maker, short run equilibrium, long run equilibrium, deadweight loss, efficiency, antitrust policy

Chapter 16

  • Key Concepts: oligopoly, monopolistic competition, duopoly, game theory, collusion, cooperation

Chapter 22

  • Key Concepts: asymmetric information

Practice test #1 (graph questions)

Practice test #2 (questions 20-31)