[ECON 224] Comprehensive spring guide including any lecture notes, textbook notes and exam guides.find more resources at oneclass.com
Exam is open until Sunday at midnight and has a time limit of 75 minutes and 50 multiple choice
Module 1: Intro
● Define economics. Explain how economics applies to the real world. Think about scarcity and
● Define opportunity cost. Identify opportunity cost in various decisions, at the individual, business,
and society level.
● Evaluate statements as being positive or normative
● Define macroeconomics and microeconomics. Identify questions which fall under each category.
● Provide a detailed description of the circular flow diagram.
● Compare and contrast command and market systems.
● Explain the Four Fundamental Questions.
● Name the four types of markets.
● Discuss the characteristics of a competitive market, monopoly, monopolistically competitive and
oligopoly. Compare and contrast these market structures.
Readings: Chapter 1 pp. 3-14 (end at the Production Possibilities Model); Chapter 2 pp. 27-43; Chapter 7
pp. 153-156; Chapter 8 pp. 180-182, 193-195; Chapter 9 pp. 204-206, 210-213.
Economics: about wants and means — the social science concerned with how individuals, institutions
and society make choices under conditions of scarcity
● Assume that humans are rational and self-interested
● Marginal analysis: comparisons of marginal benefits and marginal costs
● Marginal = “extra” or “add-on”
● Stop when the marginal benefit is less than the marginal cost
Opportunity cost: to obtain more of one thing, society forgoes the opportunity of getting the next best
● That sacrifice is the opportunity cost of the choice
● On the Module 1 Quiz, one question states: The opportunity cost of a decision will depend on the
next best option for each individual.
Positive statement: when economists state the facts of the economy
Normative statement: when economists give opinions about the economy
Macroeconomics: examine either the economy as a whole or its basic subdivisions
Microeconomics: concerned with decision making by individual consumers
Command system: also known as communism or socialism, the government owns most property
resources and economic decision-making occurs through a central economic plan
● Ex: North Korea
Market system: also known as capitalism, a market system is characterized by the private ownership of
resources and the use of markets and prices to coordinate and direct economic activity
● Participants act in their own self-interest
● Powerful incentive to pioneer and innovate
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