1. Microeconomics ECON 2302 Spring 2010 Marilyn Spencer, Ph.D. Professor of Economics Review: Chapters 6, 10, 11 & 12

2. Announcement 4 I will not hold office hours Thurs., Apr. 15.

3. Exam 2 4 Test format (same as Exam 1): Ü25 multiple choice questions ÜResources sheet to indicate any additional resources used – same resource choices as for 1 st exam ÜQuestions include definitions, theory & applications. – Expect graphs and numbers. Ü1 hour time period ÜScantron answer sheet provided

4. Chapter 6 EXAM QUESTION TOPICS  Determinants of price elasticity of demand  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

5. 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  LONG RUN:  Returns to scale  Minimum efficient scale

6. 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

7. Chapter 12 EXAM QUESTION TOPICS  Monopolistic competition market assumptions  Elasticity of demand for a monopolistically competitive firm  Monopolistically competitive profit maximization/ loss minimization in the Short Run  Causes of long run entry and exit  Implications of long run entry and exit  Pros and cons of monopolistic competition v. perfect competition

8. Any questions on any of these topics?

9. Assignment to pre-read Ch. 13 by April 6: 4 Review Questions: p. 464, 1.1 – 1.3; p. 466, 2.1, 2.3, 2.4 & 2.5 (1 st edition: 1-4, 6-8 & 10 on pp. 436-43), and 4 Problems and Applications: p. 465, 1.10; p. 466, 2.6, 2.7 & 2.10; p. 467, 2.17; p. 468, 2.19; and: The city is considering auctioning licenses that would allow one or two vendors to sell ice cream on the local beach. ÜIf the city licenses two vendors, will it receive more in total license fees than if it sells a license to only one vendor? ÜWill people who use the beach be better off if the city licenses two vendors or one vendor? ÜSuppose the city licenses two vendors but announces that every year it will sell licenses to two new vendors. The same vendor may not hold a license more than once every five years. Would this make any difference to the prices the vendors change? (1 st edition: 1, 2, 3, 4, 11, 15 & 21 on pp. 437-440).