ECO 2030

ECO 2030. Principles of Economics-Price Theory

Exam #3 Study Guide

Cumulative Material

Chapter 1

Key Concepts: "Principles" 1-7

Chapter 4

Key Concepts: law of demand, demand shifts, law of supply, supply shifts, equilibrium price, equilibrium quantity, changes in equilibrium

New Material

Chapter 9

Key words: efficiency gains from international trade, tariffs, quotas
Problems and applications (pp. 196-197): #1 (answer), #3 (answer)

Chapter 10

Key words: market failure, negative externality, market inefficiency, command and control, pollution taxes, tradeable pollution permits
Problems and applications (p. 221): #7 (answer)

Chapter 11

Key words: rival vs. nonrival, excludable vs. nonexcludable, public goods, free riders, market inefficiency, role of government
Problems and applications (p. 238): #3 (answer)

Chapter 14

Key Concepts: competitive market, efficiency, free entry and exit

Chapter 15

Key Concepts: monopoly, barriers to entry, deadweight loss, efficiency, anti-trust policy, natural monopoly, regulation
Questions for review (p. 339): #4, #5 (answer) [note: instead of understanding the monopoly price and output as the intersection of MR and MC, we understood it as a monopoly supply curve to the left of the competitive market supply curve]