Econ101 Principles of Microeconomics exam1

Econ101 Principles of Microeconomics exam1

50 min 50 multiple choice

@ First we will try to do the sample test then we will go for the exam

Course Catalog Description

Resource allocation, opportunity cost,

comparative and absolute advantage. Supply and

demand. Marginal analysis. Theories of production and consumption, pricing, and the

market system. Perfect and imperfect competition and strategic behavior. Factor markets.

Present discounted value.

Learning Outcomes

1.Develop an “economic thought process” that considers human actions and interactions

from the perspective of choices being made by individuals who continually compare

expected benefits and costs.

2.Demonstrate how the optimizing actions of individuals (consumer behavior) and firms

(producer behavior) underlie demand and supply in markets that interact to determine

price and quantity.

3.Explain how government policies have the potential to either improve resource

allocations or exacerbate market failures.

4.Critically think about and relate key microeconomic concepts to real world economic

issues and policies.

Learning Objectives

1.Show fluency in the basic terminology of microeconomics by defining fundamental

economics concepts such as opportunity cost, comparative advantage, supply, demand,

equilibrium, elasticity, relative price, marginal utility, marginal product, profit, sunk

cost, perfect/imperfect competition, oligopoly, externality, public goods, deadweight

loss, among others. Distinguish objective statements from subjective opinions,

recognizing the importance of both.

2.Apply the concepts of choice and opportunity cost to common situations that involve

scarcity and tradeoffs. Utilize production possibility frontier (PPF) to demonstrate

feasible and infeasible production possibilities, efficient use of resources, and

increasing opportunity costs. Apply the concepts of comparative advantage,

specialization, and exchange to analyze basic resource allocation issues.

3.Explain the “marginal concept” that individuals and firms can make optimal decisions

by weighing incremental benefits and costs associated with slight changes in the

relevant choice variable. Utilize both the total revenue/total cost approach and the

marginal revenue/marginal cost approach to illustrate how a firm finds its profit maximizing output level.

4.Explain how equilibrium price and quantity are determined in both competitive and

imperfectly competitive markets using graphs as tools for economic analysis. Outline

how different market structures, firm technologies, and government policies affect

market equilibrium and welfare outcomes. Contrast market outcomes under different

market structures and apply basic analyses of how exogenous shocks affect supply,

demand, prices, and welfare. Explain why governments sometimes impose a price

ceiling, price floor, or excise tax on market, along with the likely consequences of such

interventions.

5.Explain how government policies have the potential to either improve resource

allocations or exacerbate market failures. Compare and contrast allocative efficiency

and distributional “fairness”.