First Exam

First Exam: Chapters 1, 3, 4, 6, and 24

Concepts

Scarcity

Marginal Cost, Marginal Benefit, and Opportunity Cost

Deduction and Induction

Rationality

Self-interest

Enlightened self-interest

Purposeful behavior

Positive/normative/art of economics

Demand

·       Law of Demand

·       Shift variables

·       Market demand

Supply

·       Law of Supply

·       Shift variables

·       Market supply

Supply and Demand together

·       Market equilibrium

The Invisible Hand (and the invisible foot and invisible handshake)

Institutions (definition and examples)

Type of Economic Models

Traditional vs. Modern Economics

Behavioral Economics

Economic Growth

The Business Cycle

GDP

·       Definition

·       Real and nominal

·       Per capita GDP

·       Real and nominal GDP

Unemployment

·       Types of unemployment (frictional, seasonal, structural, cyclical)

·       Measuring the unemployment rate

·       Labor Force

·       LF participation rate

·       Okun’s Rule

Inflation

·       Price index (CPI and GDP deflator)

Problems You Should Be able to Solve

Shifting supply and demand curves, determining the effect on price and quantity

Describing (and drawing) the parts of the business cycle

Calculate the Labor Force Participation Rates

Calculate Unemployment Rates

Calculate real GDP from nominal GDP

Calculate Inflation rates