ECON 2010- Midterm Exam Guide - Comprehensive Notes for the exam ( 55 pages long!)
Document Summary
Describe how the demand and supply cures summarize the behavior of buyers and sellers in the marketplace. Discuss how the supply and demand curves interact to determine the equilibrium price and quantity. Illustrate how shifts in supply and demand curves cause prices and quantities to change. Explain and apply the efficiency principle and the equilibrium principle (also called the no-cash-on-the-table principle ) Central planning: decisions by individuals or small groups, agrarian societies, government programs, sets prices and goals for the group. Individual influence is limited: buyers and sellers signal wants and costs, resources and goods are allocated accordingly, interaction of supply and demand answer the three basic questions. *mixed economies use both the market and central planning. The market for any good consists of all the buyers and sellers of the good. Buyers and sellers have different motivations: buyers want to benefit from the good, sellers want to make a profit.
