Macro Learning Objectives for questions over Exam 1 Form A

 

PCM

 ECON 2301 MACROECONOMICS

Chapter 2

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 1 that will test your knowledge of that specific learning objective. Each of these topics/learning objectives is discussed in the textbook in the order that they are listed below.  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 fully what is meant by land, labor, capital, human capital, entrepreneurship, and technology. (Section 2.1)
  2. Explain what is meant by opportunity cost. (Section 2.1)
  3. Draw a production possibilities frontier, to explain its shape and meaning, and to discuss how opportunity cost (both total and marginal) can be illustrated with it. (Section 2.2)
  4. Explain what is meant by the law of increasing cost, be prepared to also be able explain why it exists (and concurrently why the production possibilities frontier is bowed out from the origin). (Section 2.2)
  5. Show how a production possibilities frontier can be used to illustrate efficiency, inefficiency, and scarcity (impossible combinations of output). (Section 2.2)
  6. Show how a production possibilities frontier can be used to illustrate economic growth and technological change, even if the technological change is specialized. (Section 2.2)
  7. Explain and draw the simple modal of the Circular Flow of Economic Activity labeling its markets, actors, real and money flows, and explain what money is and what its function in the economy is. (Section 2.3)
  8. Define the difference between absolute advantage and comparative advantage and explain which one is more important as a basis for specialization and trade. (Section 2.4)
  9. Be able to compute absolute and comparative advantage from numerical examples and to tell from such computations which country should specialize in which product. (Section 2.4)
  10. Convey how economic growth and the strength it provides can lead to victory in international conflicts. (Section 2.5)