ECON101 Study Guide - Final Guide: Absolute Advantage, Invisible Hand, Natural Monopoly
22 May 2016
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For chapters 1-10 and 12, you should understand the basics and the broad ideas. Optimization in differences- calculates the change in net benefits when a person switches from one alternative to another and then uses these marginal comparisons to choose the best alternative b. ii. Marginal analysis: is a cost-benefit calculation that studies the difference between a feasible alternative and the next feasible option b. ii. 1. Compares the consequences of doing one step more of something b. ii. 3. Marginal cost is the extra cost generated by moving from one alternative to the next alternative: supply and demand: a. Why the curves look the way they do (supply slopes up; demand slopes down) a. i. Supply slope up: upward sloping = positive slope a. ii. Demand slope down: downward sloping = negative slope a. iv. Shift in a curve versus movement along a curve (the difference between a shift in demand and a change in quantity demanded ) b. i.
