January 15, 2007

Microeconomics (ECO101)

Assignment

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Submit handwritten answers to the following questions.  Each question should have comprehensive, but short – a paragraph, or two (no more than half a page!) - answer.  Use appropriate illustrations (diagrams, charts, formulas, tables) where necessary.  You are welcome to use any available source:  text-book, handouts, additional reading, web sites.

           I.      Society, Economics, Production

1.                economics, microeconomics, macroeconomics

2.                economic allocation: resources, production, distribution, exchange, consumption

3.                free goods vs. economic goods

4.                scarcity, alternative uses

5.                opportunity cost

6.                production, inputs, outputs

7.                production-possibility frontier (PPF)

8.                productive efficiency & inefficiency

       II.      Economic Systems, Market Economy

1.                three basic economic questions

2.                economic systems, their types

3.                advantages / disadvantages of each economic system

4.                market economy, consumer sovereignty

5.                 market mechanism, circular flow

6.                markets for goods & services and markets for factors of production

7.                market failures, government role: efficiency, equity, stability

8.                positive/negative externalities, public vs. private goods

9.                objectives of government policies

   III.      Demand & Supply: Equilibrium

1.                demand, law of demand

2.                individual/market demand

3.                supply, law of supply

4.                individual/market supply

5.                excess supply & demand

6.                equilibrium, equilibrium price & quantity

7.                price floors & ceilings

8.                movements along vs. shifts in supply & demand (change in quantity demanded/supplied vs. change in demand/supply)

9.                determinants of demand

10.           determinants of supply

     IV.      Elasticity of Demand & Supply

1.                general definition of elasticity

2.                price elasticity of demand

3.                elastic, unit-elastic, inelastic, perfectly elastic/inelastic demand

4.                elasticity of a linear demand

5.                determinants of price elasticity of demand

6.                sales/revenues and price elasticity of demand

7.                other elasticities of demand, types of goods

8.                price elasticity of supply

9.                determinants of price elasticity of supply

         V.      Demand: Consumer Behavior

1.                utility, total utility, marginal utility

2.                law of diminishing marginal utility

3.                equi-marginal principle of consumption

4.                indifference curve, budget constraint

5.                income & substitution effects

6.                types of goods: substitutes/complements, normal/inferior, merit/demerit

7.                consumer surplus

Please submit this assignment on the day of your Mid-Term Exam.  Submissions after the exam will not be accepted.  Submission after the Mid-Term Exam will result in loss of points towards your total grade !