Macro Learning Objectives for questions over Exam 2 Chapter 8

 

FALL/SPRING/SUMMER

PCM

 ECON 2302 MICROECONOMICS   

Chapter 8

Below you will find the learning objective, concept, idea, term, or theory that each question on the exam will cover. The numbers in the list refer to the question number on Exam 2 that will test your knowledge of that specific learning objective. You will also find a reference to the page numbers in the textbook, Microeconomics, Explore & Apply: Activebook Version 2.0 where the substance of each question is explained. A much better understanding can often be attained by working through the "active graphs" and "smart graphs" connected to many of these objectives in the online material.

 

  After reading this chapter, you should be able to:

  1. Define the terms fixed cost, variable cost, and sunk cost, and relate these concepts to the production function. Page 118
  2. Explain how Total Cost, Average Cost, and Marginal Cost relate to Total Output and calculate, and graph (from given data) the relationships between Average Total Cost, Average Variable Cost, and Marginal Cost. Pages 119-121
  3. Explain the relationship between Marginal Cost & Marginal Product and between Average Cost & Average Product and why Marginal Costs must eventually rise. Pages 123-124
  4. Define Total Revenue and Marginal Revenue and explain why Marginal Revenue is the same as the price of a good produced by a price taking firm. Page 125
  5. Explain what the general rule of profit maximization is and what the rule is in the particular case of a price taking firm. Page 126
  6. Explain the rule of loss minimization and how it is related to profit maximization. Page 127
  7. Calculate profit and loss and use graphs to illustrate both profit and loss, respectively. Page 128-129
  8. Explain the shutdown rule and state it in terms of revenue/cost and in terms of price. Pages 128-129
  9. Define and apply the concepts of economies of scale, constant returns to scale, and diseconomies of scale. Pages 130-131
  10. Discuss U.S. farm policy.  Pages 132-134