Introductory microeconomics: revision questions


1.       Scarcity and choice. Marginal analysis. Opportunity costs and trade-offs. Production possibility frontier.
2.       Comparative advantages. Specialization and exchange
3.       Determinants of demand and supply. Market equilibrium. Deficit and surplus
4.       Consumers’ surplus, producers’ surplus and market efficiency
5.       Price and quantity controls. Tax incidence and dead weight loss
6.       Price elasticity of demand
7.       Elasticity of demand and total revenue of producers
8.       Cross-price elasticity of demand: substitutes and complements. Income elasticity of demand: normal and inferior goods. Price elasticity of supply
9.       Application of elasticity theory: taxation
10.    Total and marginal utility. Preferences: main assumptions. Indifference curves. Marginal rate of substitution
11.    Budget constraint
12.    Utility maximizing conditions
13.    Adjustment to price and income changes: income effect and substitution effect. Normal and inferior goods. Substitutes and complements. Consumer choice and the law of demand
14.    Production functions: short and long run. Average and marginal product. Diminishing returns. Economies of scale
15.    Opportunity cost and accounting costs. Total, average and marginal costs: short run and long run. Technology and costs. Cost minimizing input combination
16.    Total, average and marginal revenue. Accounting versus economic profits. Profit maximization
17.    Product markets: characteristics and types. Perfect competition as a market structure
18.    Perfectly competitive firm and market: profit maximization and supply in short run
19.    Producer’s surplus in short run
20.    Behaviour of firms and markets in long run
21.    Market structure determinants
22.    Profit maximization by a monopoly
23.    Monopoly power. Inefficiency of monopoly
24.    Natural monopoly
25.    Price discrimination
26.    Monopolistic competition as a market structure. Behaviour of firms in a market of monopolistic competition: short-run and long-run. Excess capacity and inefficiency
27.    Oligopoly as a market structure. Kinked demand and sticky prices. Price wars and collusion
28.    Game theory: interdependence and strategic behaviour
29.    Labour supply
30.    Derived demand for factors of production. Marginal revenue product and marginal factor cost: profit maximization
31.    Perfect competition at output and labour markets: marginal value product of labour and a firm’s demand for labour. The demand curve for labour of a perfectly competitive industry. Equilibrium in labour market
32.    Monopoly in product market and perfect competition in labour market
33.    Perfect competition in product market and monopsony in labour market
34.    Imperfect competition both in product and labour market
35.    Demand and supply of capital. Equilibrium in capital market. Net present value and discounting. Interest rate
36.    Wage differentials: discrimination and human capital
37.    Perfect competition and Pareto efficiency. Equity and efficiency. Income distribution. Distortions and the second best
38.    Market failure. Externalities
39.    Property rights and transaction costs
40.    Public goods. Free-rider problem