Microeconomics ECON 2302 Spring 2010 Marilyn Spencer, Ph.D. Professor of Economics Review: Chapters 1-5

Announcement: Bonus Extra Credit 4 points possible When: Thursday, February 18, 7 p.m. Where: CI 102 (this room) Who: Dr. Andy Piker, professor of philosophy, will speak on steps to resolve conflicts. What: Sign in when you arrive Email a summary (approx. 100 words) of how his main points involve making choices to marilyn.spencer@tamucc.edu, before class, February 25.  

Announcement: Bonus Extra Credit 4 points possible When: Tuesday, February 23, 4-5 p.m. Where: Oso Room in the UC (Room 221) Who: Barry C. Lynn, Director of the Markets, Enterprise, and Resiliency Initiative, and a senior fellow at the New America Foundation, will speak on “Cornered: The New Monopoly Capitalism and the Economics of Destruction.” What: RSVP ahead of time at RSVP form Sign in when you arrive Email a summary of his main points (approx. 100 words) to marilyn.spencer@tamucc.edu, before class, March 2.

Exam 1, February 18 Chapters 1–5 Test format: Study PPT slides. Study assigned end-of-chapter questions. Study with a friend. Test format: Short answer questions, problem solving, graphing & multiple choice Questions include definitions, theory & applications – Expect graphing and tables of numbers. 75 minutes

Test Resources Used 3x5 card with notes, 5 test points Please check any applicable box concerning "fees" for test resources you plan to use DURING the exam: 3x5 card with notes, 5 test points   textbook and notebook, 15 test points information from others, 100 test points   Will NOT use additional resources*  * Two (2) points will be added to your score if you choose to NOT use any of these test resources.  Name (please print):____________________  ID #: ______________________ (some portion of ID#)  Signature: ___________________________

Chapter 1 MAJOR TOPICS Rational behavior Responding to incentives Positive & normative analysis Scarcity

Chapter 2 MAJOR TOPICS Production possibilities frontier model Points on curve Points below curve Points above curve Growth Opportunity cost Marginal opportunity cost Trade-offs Comparative advantage v. absolute advantage Circular flow of income model

Chapter 3 MAJOR TOPICS Law of demand Variables that affect demand Law of supply Variables that affect supply Shortage or surplus Changes in demand & supply that change the equilibrium

Chapter 4 MAJOR TOPICS Consumer surplus Producer surplus Price floors Price ceilings Effects of a tax Effects of a government subsidy

Chapter 5 MAJOR TOPICS Positive externalities Negative externalities Causes of externalities & market failures Coase Theorem Common resource problem Public goods Free rider problem

Before February 23, pre-read Ch. 6, including: Review Questions: p. 200, 1.1-1.4; p. 202, 2.1 & 2.2; p. 204, 4.1 & 4.2; pp. 205-6, 5.1; p. 206, 6.1; and “If demand for orange juice (OJ) is inelastic, will a rise in the price of OJ increase or decrease the revenue received by orange juice sellers?” (1st edition: 1-10, p. 193); and Problems and Applications: p. 202, 3.3; p. 206, 5.2; p. 202, 2.4; p. 207, 6.6; and “During 2001 in Afghanistan, the Taliban outlawed growing poppies, from which opium is made. Opium output fell by 95%, and the price of opium rose from 2,000 rupees/kg to 40,000 rupees/kg. What was the price elasticity of demand for opium in Afghanistan?” (1st edition: 2, 3, 5, 6 & 18, pp. 193-195).

Any questions?