Fundamentals of Economics PDF Notes

Fundamentals of Economics Important Topics What is the difference between microeconomics and macroeconomics? What are the three fundamental problems of an economy? What are three types of economic systems? How do these systems solve three fundamental probl...

Fundamentals of Economics Important Topics What is the difference between microeconomics and macroeconomics? What are the three fundamental problems of an economy? What are three types of economic systems? How do these systems solve three fundamental problems? What is Opportunity Cost? What are some examples of Opportunity Cost? What are economic costs and what are accounting costs? What is the Law of Diminishing Marginal Utility? What is an indifference curve? What is a budget line? How indifference curves are shaped for perfect substitutes and perfect complementary goods. How does budget line change with changing prices of goods on two axes? How does consumer equilibrium change with change in slope of budget line? What is the Consumer’s Surplus? What is the Law of Demand? What are the main determinants of demand? What is the elasticity of demand? What are main types of elasticities of demand What values does elasticities of demand take for elastic and inelastic demand? What signs does cross-price elasticity of demand have for substitute and complimentary goods? What are substitute and complementary goods? Examples of both? What are inferior goods and what are normal goods? What is the Law of Supply? How does the supply curve slope? What are the determinants of supply? What is market equilibrium? Calculate equilibrium price and quantity from equations of demand and supply? (Hint: equate demand and supply using the equations and solve for price and quantity). Change in market equilibrium by shifting demand and supply curves? Changes in equilibrium prices and quantities by shifting demand and supply curves. What is a price-floor and a price-ceiling? What are the factors of production? What are the three stages of production? Which stage will an entrepreneur choose to operate in? What are increasing, decreasing and constant returns to scale?  What are concepts of total cost, fixed cost, variable costs, average cost, marginal cost? Calculate these in a table where some of the values are given (hint: there is an example on a slide with cost table? What are sunk costs? What is a learning curve? What is the difference between learning curve and Economies of scale? What is the break-even point? Determine break-even level of output and revenue using the formula with given data. What are economies of scale and economies of scope? What are the characteristics of Perfect Competition, Monopoly, Monopolistic Competition and Oligopoly? Differentiate between these markets based on their characteristics. Give examples of each type of market. What are the conditions of short-run and long-run profit maximizing equilibrium of Perfect Competition, Monopoly and Monopolistic Competition? How are the demand curve and marginal revenue curve of each type of competition? What is Monopoly Power? (Hint: ability to set prices). What is Kinked Demand Curve model? What is Price Leadership? What are cartels? Why do cartels fail? What are first-degree (also called perfect price discrimination), second-degree and third-degree price discrimination? Give examples. Difference between Macroeconomics and Microeconomics. Three main goals of macroeconomics/macroeconomic policies? Three methods of estimating national income? GDP = C+I+G+(X-M) Factors of production and their factor payments? Circular flow of income 2-sector and 3-sector models, including capital markets.