Download Exam 2 Review

Microeconomics
ECON 2302
May 2011
Marilyn Spencer, Ph.D.
Professor of Economics
Review for Exam 2:
Chapters 5, 6, 10 & 11
Exam 2: Wednesday, May 25
 Test format (same as Exam 1):
Short answer questions
Resources sheet provided, to indicate any additional
resources used – same resource choices as for 1st exam
Questions include definitions, theory & applications. –
Expect graphs and tables of numbers.
Chapter 5 MAJOR TOPICS
 Negative & positive externalities
 What we mean by market failure
 Causes of externalities
 Deadweight loss from externalities
 Coase Theorem
 Rival v. nonrival / excludable v. non-excludable
 Quasi-public goods
 Common resource problem
 Public goods/free rider problem
Chapter 6 EXAM QUESTION TOPICS
 Price elasticity of demand
 Determinants
 Calculating price elasticity of demand
 Elasticity of demand and total revenue
 Other elasticities of demand
 Income elasticity of demand
 Cross price elasticity of demand
 Taxes and elasticity of demand
 Elasticity of supply
 Determinants
 Calculating price elasticity of demand
Chapter 10 EXAM QUESTION TOPICS
 Short run v. long run
 Economic cost v. accounting cost
 Marginal product of labor
 Average product of labor
 Family of SHORT RUN cost curves: ATC, AFC,
AVC, MC and how MC relates to the ATC & AVC
curves
 LONG RUN:
 Returns to scale
 Minimum efficient scale
Chapter 11 EXAM QUESTION TOPICS
 Perfectly competitive market assumptions/conditions
 Elasticity of demand for a perfectly competitive firm
 Perfectly competitive profit maximization
 Perfectly competitive loss minimization
 Shutdown point
 Long run entry and exit
 Efficiency of perfect competition
Any questions on any
of these topics?
Pre-read Ch. 12 before we start
going over it in class, including:
 Review Questions: 3rd ed. p. 422, 1.1—1.3; p. 426, 4.1, 4.2; p.
6.1, 6.2 (2nd ed., p. 432, 1.1 – 1.3; p. 436, 4.1 & 4.2; p. 438, 6.1 &
6.2; 1st edition: 1, 2, 3, 7 8 & 10 on pp. 406-407); and
 Problems and Applications: 3rd ed. p 422 1.4; p 423, 2.5;
p424, 2.11; p 425, 3.3 (2nd ed., p. 432, 1.4; p. 433, 2.5; p. 435, 3.3;
& p. 4.34, 2.11; 1st edition: 1, 3, 5 & 17 on pp. 407-410).