PCM

 ECON 2302 MICROECONOMICS   

Below you will find the learning objective, concept, idea, term, or theory that each question on the exam will cover. Each number in the following list refers to the question number on Exam 2 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 MyEconLab assignments connected to any of these objectives.

Chapter 5

  After reading this chapter, you should be able to:
  1. Describe what economists mean by market failure.
  2. Explain the concept of external benefits and negative externalities.
  3. Describe the economic functions of government.
  4. Distinguish the difference between public goods and private goods.
  5. Describe the free rider problem.
  6. Describe the political functions of government and how they affect the economy.
  7. Discuss the economics of Medicare.
  8. Discuss the economic issues involved in public education.
  9. Describe the similarities between markets and collective decision making
  10. Describe the difference between markets and collective decision making.

Chapter 19

 

  After reading this chapter, you should be able to:

  1. Define the price elasticity of demand in words.
  2. Calculate the price elasticity of demand using its formula.
  3. Explain the difference between elastic demand and inelastic demand.
  4. Differentiate between Perfectly Elastic Demand and Perfectly Inelastic Demand.
  5. Explain the relationship between price elasticity of demand, price changes, and total revenue.
  6. List the factors that determine the price elasticity of demand.
  7. Describe cross elasticity of demand and how is can be used to indicate whether two goods are substitutes or complements.
  8. Define income elasticity of demand in words and by formula.
  9. Define and Classify price elasticities of supply.
  10. Show how the passage of time affects price elasticity of supply.

Chapter 20

 

  After reading this chapter, you should be able to:

  1. Define utility and utils.
  2. Distinguish between total utility and marginal utility.
  3. Discuss the concept of diminishing marginal utility.
  4. Explain how a consumer optimizes utility by equalizing the marginal utility per dollar spent across all goods and services.
  5. Describe the substitution effect of a price change on the quantity demanded.
  6. Explain how the real income effect of a price change affects the quantity demanded.
  7. Discuss the diamond-water paradox.
  8. Graph and describe the properties of an indifference curve.
  9. Graph and be ready to explain a budget constraint.
  10. Illustrate consumer optimum within the indifference curve analysis.

Chapter 21

 

  After reading this chapter, you should be able to:

  1. Define what is meant by Economic Rent and explain what role it plays in economic theory.
  2. Explain the role that profits/losses play in the functioning of business firms and the allocation of scarce resources in a society.
  3. Explain what proprietorships and partnerships are, their similarities and differences, and their strengths and weaknesses.
  4. Discuss what corporation is, how it differs from proprietorships and partnerships, and explain its strengths and weaknesses.
  5. Explain why the difference between Accounting Profit and Economic Profit is so important to economic theory.
  6. Explain what interest is and what the interest rate is, and explain the role it plays in business decision making.
  7. Define what is meant by present value and be able to do rudimentary calculations of present value.
  8. Explain the various ways available to finance corporate activity.
  9. Explain the role markets for stocks and bonds play in the economy and in connection to corporate finance.
  10. Define and explain the concept of efficient markets.