AP微觀經(jīng)濟知識點

1、v1.0可編輯可修改14Sherry Yao99AP MICRO REVIEW1. Basic Economic Concepts (8%-14%)A.Scarcity, choice, and opportunity costScarcity: the limited nature of society's resourcesB.Economics: the study of how society manages itsPeople face trade-off (efficiency or equality)scarce resourcesOpportunity cost: wh

2、atever must be given up to obtain some itemProduction possibilities curveThe production possibilities curve shows the combinations of outputthat the economy can possibly produce given the available factors ofQysteeperfPPF shiftline4. Technology advanceC.a lowerComparative advantage, absolute advanta

3、ge, specialization and tradeComparative advantage: the ability to produce a good at opportunity cost than another producerAbsolute advantage: the ability to produce a good using fewer inputsthan another producersTrade can benefit everyone in society because it allows people to specialize in activiti

4、es in which they have acomparative advantage .D. Economic systemE. Property rights and the role of incentivesProperty rights: the ability of an individual to own an exercise control over scarce resourcesMarket powerMarket failure: allocate resources inefficiently 1 一Negative externalityIncentive: so

5、mething that induces a person to act (the prospect of a punishment or a reward)F. Marginal analysisMarginal change: a small incremental adjustment to a plan of actionPeople make choice when marginal benefit > marginal cost2. The Nature and Functions of Product Markets (55%-70%)A. Supply and Deman

6、d (15%-20%)a) Market equilibriumA situation in which the market price has reached the level at which quantity supplied equals quantity demandedb) Determinants of supplyIncome: income J , demand of normal goods J , demandof inferior goodTPrices of related goods: price of substituteJ , demand of anoth

7、erpricegood Jof complements J , demand of another goodTastesExpectations: expect higher income, demand TNumber of buyers: buyers T, demand Tc) Determinants of demandInput price: input price T , supply JTechnology: advance in technology, supplyTExpectations: expect the price of goodsT , supply TNumbe

8、r of sellers: number of sellersT, supply Td) Price and quantity controlsDemand, priceT , quantityTSupply f, priceJ , quantityTT , total revenue TT , total revenuee) ElasticityDemand Curve Inelastic: PriceDemand Curve Elastic: PriceNormal Goods & Income Elasticity:The Quantity of Normal Goods mov

9、es the same direction with thePercentage of Income 對 normal goods 的需求量與收入變動同方向運動The Elasticity of Normal Goods is usually positiveInferior Goods & Income ElasticityThe Quantity of Inferior Goods moves the opposite direction withthe Percentage of Income 對 inferior goods的需求量與授予變動反方向運動The Elasticit

10、y of Inferior Goods is usually negativeExy > 1, substitute, Exy< 1, complementaryf) Consumer surplus, producer surplus, and allocative efficiencyConsumer surplus: the amount a buyer is willing to pay for a good minus the amount the buyer actually pays for itminus theProducer surplus: the amoun

11、t a seller is paid for a good seller ' s cost of providing itg)Allocative efficiency: the last unit provides marginal benefit toconsumer = the marginal cost to producerTax incidence and deadweight lossTax incident: the manner in which the burden of a tax is a shared among participants in a marke

12、tElasticity T , the tax burden JDeadweight loss: the fall in total surplus that results from a market distortion such as taxPrirMarket quanUty with caHil igQuantityB. Theory of consumer choice (5%-10%)a) Total utility and marginal utilityTotal utility:The aggregate level of satisfaction or fulfillme

13、nt that a consumer receives through the consumption of a specific good or serviceMarginal utility: gain from an increase, or loss from a decrease, in the consumption of that good or serviceb) Utility maximization:equalizing marginal utility per dollar.(MUX/Px=MWPy)c) Income and substitution effects替

14、代效應(yīng)比薩餅數(shù)鬲C. Production and Costs (10%-15%)a) Production functionsofProduction function: the relationship between the quantityinputs used to make a good and the quantity of output of that goodThe quantity of the input T , the production function gets flatterb)Marginal product and diminishing returnsMa

15、rginal product: the increase in the amount of output from anadditional unit of laborDiminishing return: the property whereby the marginal product ofan input declines as the quantity of the input increasesc)Short-run costsFixed cost in the short rund)Long-run costs and economies of scaleTM0Cott412,00

16、010.000虹翔電ATC in ahart run *i 由 La roe factoryATC in shwr cun *帥 ->',*11 taclo(>y -turna gQumitHy of C» pCi 孫TC m VMM rufi布，小 niedium tMimrooo lxoVariable cost in the long runEconomies of scale: the property whereby long-run average total cost J as the quantity of outputDiseconomies o

17、f scale: the property whereby long-run average total cost T as the quantity of output TConstant returns to scale: the property whereby long-run averagetotal cost stays the same as the quantity of output changese) Cost minimizing input combination and productive efficiencyEfficient scale: the quantit

18、y of output that minimized averagetotal costProduces goods in the quantity where MCintersect with ATC(min ATC)D. Firm behavior and market structure (25%-35%)a) ProfitShort-run profit: When ATC < (MR=MC)Long-run profit (Normal profit) = zeroEconomic profit: total revenue - total cost (explicit + i

19、mplicit)Accounting profit: total revenue - total explicit costProfit Maximization: produce where MC=MRb) Perfect competitionCharacteristics: Price takesFree entry & exitMany sellers & buyersFully substitutablePerfectly elastic (demand curveHomogenousLong run: P=ATCMC=MR=PProfit maximization:

20、 MC=MR=P=ATCShort run supply and shutdown decision: 1. P < ATC: Economic Loss2. AVC < P <ATC: Operate in theShort run but exit in the longrun=AVC/ P<AVC: shut down in shortrunc) MonopolyCharacteristics: single sellerHigh barriers to entryNo substitutes (have key resources)InelasticPrice

21、makerEconomics profit (P> MC=MR)Profit maximization: produce quantity in Q*, price in P*Natural monopoly: a single firm can produce output at a lower cost than can a larger number of producers (MC horizontal)Inefficiency of monopoly: Price> MR=MC- deadweight lossPrice discrimination: the busin

22、ess practice of selling the samegood at different prices to different customers (reduce consumersurplus f profit)Social optimal: MC=Dd) Monopoly competitionCharacteristics: monopoly < number of sellers < competitive marketImperfect substitutesImperfect inelasticityHeterogeneous productsPrice m

23、akerLong-run profit=zeroShort-run monopoly competitionLong-run monopoly competition1. P* = ATC2. Eco Profits = 03. P* > min ATCExcess capacity: the quantity produced < efficient scale f excess capacitythe price> marginal cost f markupThe product-variety externality: positive externalityThe

24、business-stealing externality: negative externalitye)OligopolyCharacteristics: few sellers control the whole marketFewer substitutesPrice makerInterdependence in pricingInefficiencyEconomic profitP >MC. P> MRCollusion: an agreement among firms in a market about quantities to produce or prices

25、to chargeCartel: a group of firms acting in unisonGametheory: the study of how people behave in strategic situationNash equilibrium: reached when the choices of all firms are suchthat there is no other choice that makes any firm better off(increases profits or decrease loss)Dominant strategy: a stra

26、tegy that is best for a player in a gameregardless of the strategies chosen by other playersThe output effect: P > MC, output T , profit TThe price effect: Q T , P , profit JOutput effect > price effect f increase production3. Factor Markets (10%-18%)A. Derived factor demandDemand for a factor

27、 of productionB. Marginal revenue productThe addition unit of product brings addition revenueC. Hiring decisions in the markets for labor and capitalA competitive, profit-maximizing firm hires workers up to the pointwhere the VMPL = wageD. Market distribution of incomeWage =VMPL= Price x MPLE. Labor

28、 demand shiftPT , VMPL T , labor demand -Advance in technologyThe supply of other factorsF. Labor supply shiftChanges in tastesChanges in alternative opportunities immigration4. Market Failure and the Role of Government (12%-18%)A. ExternalitiesPositive externality: social benefit> private benefi

29、tNegative externality: social cost> private costCorrective tax: a tax designed to induce private decision makers to take account of the social costs that arise from a negative externalitySubsidiesB. Public goodsPrivate goods: excludable & rival in consumption (clothing/congested toll roads)Public goods: not excludable & not rival in consumption (national defense/uncongested nontoll roads)Common resources:not excludable & rival in consumption(environment/congested nontoll roads)Club goods: excluda