Scm Final

Review Sheet for Exam 1: Here are a summary of key concepts seen in class. They should be covered in the level of detail seen in class. If you have questions please don’t hesitate to email me. The format of the exam will be similar to the sample exams posted on Blackboard

1. Indifference curves and budget constraints. Special focus on the tradeoffs between risk and return (indifference curves, risk premium, certainty equivalent) and integrity and income (indifference curves and budget constraint). BSZ Chapter 2

2. Opportunity Cost class exercise.

3. Gains from exchange – absolute and comparative advantage and specialization. Crusoe class example and Portugal England example in article. BSZ Chapters 3,4

4. Demand and Supply – slope, elasticity, shifts, equilibrium. Consumer and Producer Surplus. BSZ Chapters 3,4. Quick look at article Bust and Boom.

5. Effect of price controls (price ceiling and price floors) on shortage/ surplus, change in consumer and producer surplus and deadweight loss. Examples of minimum wage and price cap on oil. Effect of Tariff and quota. BSZ Chapters 3,4, Article: “Protectionist Trade Policy”.

6. Market for foreign exchange. Article” Note on Exchange Rate Determination. Big Mac class exercise. Quick look at articles Sizzling, When the chips are down

7. Costs of production: Fixed vs. variable costs, averages and marginal computations, relationship between cost curves, Break even Calculation. Chapter 5

8. Market structure: HHI computation, barriers to entry, characteristics of different markets and short and long run equilibrium. Relationship between Demand and Marginal revenue in competitive and non-competitive markets. Economic vs. accounting profit. Market conditions that promote cooperation among firms. Discussion in article “Dynamics of price competition”. Compare OPEC vs. CIPEC.

Chapter 6.

Note: The articles not mentioned here but discussed in class will not be included as specific questions in the exam but are...