Final exam review

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Principles of Micro Final Exam: Wednesday, April 17th, 10:00-11:30

Chapters: 16, 18, 19, 20

Ideas on the Exam

Oligopoly and Monopolistic Competition

·        The difference between a monopolistically competitive industry and an oligopolistic industry

·        The four characteristics of a monopolistically competitive industry

·        Compare monopolistic competition outcomes to monopoly outcomes

·        The role advertising plays in monopolistic competition

·        Characteristics of oligopoly

·        Cartels

·        Sticky prices and the kinked demand curve

Regulation

·        Sherman Anti-Trust Act

·        The Clayton Act

·        Judging industry be performance and by structure

·        Horizontal, vertical, and conglomerate mergers

Labor markets

·        How labor is different from other resources that are traded through markets

·        The difference between real wages and nominal wages

·        The labor-leisure trade-off

·        Labor supply curve, including income and substitution effects of wages

·        Elasticity of labor supply determinants

·        Labor Demand as Derived Demand

·        Elasticity of labor demand determinants

·        Determinants of wages, including productivity and social/cultural factors

Income Distribution

·        Lorenz curves

·        Relative and absolute poverty

·        Debates about the US definition of poverty thresholds

·        The difference between wealth and income

·        Equality of opportunity vs. equality of outcomes

·        Income redistribution programs, including taxation and expenditure programs