Microeconomics Final Exam

Looking for an expert in Microeconomics to take a final exam this week. Only experts need to inquire; prefereably from the United States. I have attached the concepts that need to be known in order to do well on the exam.

Microeconomics: Learning Objectives for review.

1. Describe the basic problem of economic scarcity and tasks of an economic system, using economics terms.

a) Purpose of economic systems and economics

· 3 basic tasks

b) Rational Choice:

· marginal costs and benefits

c) Opportunity cost

d) Efficiency in Allocation and Production

2. Explain the elements of market demand

a) Determinants of demand, what causes demand to shift vs. Movements along the curve

b) Elasticity of demand:

· what determines it

· how price changes affect revenues /depends on elasticity

c) how demand represents consumer benefits (willing ness to pay) and how consumer surplus is determined.

3. Explain the elements of market Supply

a) Determinants of demand, what causes demand to shift vs. Movements along the curve

b) Define and compute short and long run costs of production and explain the profit maximizing decisions of a competitive firm

4. Describe the competitive market model:

a) What are the necessary assumptions of the competitive model

b) Explain short and long run outcomes in market equilibrium.

5. Evaluate the market structure of non-competitive markets and discuss various models to explain firm strategies.

a) Monopoly, Oligopoly, monopolistic competition

b) Barriers to entry, product differentiation, concentration measures

c) Marginal revenue, game theory, Nash equilibrium, rivalry

d) Antitrust policy

6. Discuss the causes of market failure other than market structure and the use of antitrust, regulation, tax or other policies to correct market failure.

a) Externalities

b) Natural monopoly

c) Information problem

Thischart outlines what is on the final. It includes all topics, principles, terms and graphs that may be on the final exam. If it is not here it is not on the final. Graphs marked with $ are shown in a separate review document. There is also a set of study questions.

Market model: supply and demand; show shift in D or S, shortage/surplus; change in equil p and Q $

Given 2 demand or supply curves that cross at a pt – explain which is more elastic; given a price change, show change in revenue on graph.$

Identify demand and MR for monopolist; show profit max output, price, for monop and DWLoss to economy$ ; compare competitive and monop ouput (if MC of monop is supply of compet producers

Kinked demand$; show effect of prod diff, entry and long run out come in Mon comp

Natural monopoly graph (ATC with very large EOS)$

Use S and D to Show inefficient output with extermalities (production or consumption) ; use S and d to show assym information and adverse selction problem$

Important concepts/ topics	What you need to know re Graph	Other Terms to define
· Opportunity costs/ scarcity/ · no free lunch; · productive efficiency · allocative efficiency · growth	Production poss curve (PPC) to show opp cost of increasing output of one good, change in allocation (what is produced); inefficient output combo	Resources (factors of production) capital, labor & human capital, allocation
· Law of demand / supply) · shift of demand (or supply); · shortage or surplus; · price ceiling (or floor); · rational choice based on marginal cost / marginal cost	Price signal; incentive
· Consumer sovereignty; · business types	Show how a short run change in price will lead to long run change in supply, price and output	Long run vs short run;
· Price Elasticity of demand · change in revenue related to price elasticity of demand; · determinants of price elasticity	Elastic; inelastic; income effect; substitution effect
Diminishing marginal utility; consumer choice principle consumer equilibrium the equi-marginal principle;	No utility graphs on final, but you will need to compute marginal and total utility from a chart	Utility , marginal utility; bounded rationality
Diminishing marginal returns; marginal cost; Economies/diseconomies of scale	Identify MC and ATC curves and their relation to each other.	TC,FC, VC, MC, ATC,
Profit maximizing rule for competitive and other producers; shutdown choice; allocative or productive efficiency; short run supply normal profit in long run;	Competitive market: given price (=MR), MC and ATC, show profit max output, total profit, average profit; use AVar cost to determine whether firm will shutdown	Price taker, price maker; Shut down vs exit; Profit, MR, normal returns; economic vs accounting profits; implicit vs explicit costs
Market structures/characteristics barrier to entry product differentiation market power
Marginal revenue; Producer/consumer surplus; deadweight loss; price discrimination outcome;	Govt barriers – Patent, copyright; license; control of retail mkt or input	Product differentiation effect on market power and supply; Collusive/cooperative strategy; nash equilibrium; rivalry strategy	Interdependence of oligop; concentraton measures; Brand loyalty; rivalry; game theory; nash equilibrium; price leadership;cartel	Natural monopoly regulation (targets/incentives); market power correction – antitrust – behavioral and structural corrections	Sherman and clayton act; exclusive dealing , predatory pricing; price fixing; natural monopoly; MES	Externality; asymmetric information – adverse selection, moral hazard; public goods problem; ownership of commons problem;	Free rider; production/ consumption externality; social and private cost or benefits