Study Guide

(Note: If you do not take the required Final Exam, you will receive a WF-Withdraw Fail in the course.) 

Final Exam Date: Wednesday, Dec. 14th from 10 am - noon 

The final exam will consists of three large questions. Below are a list of potential questions that will appear on the final exam. I will choose three questions from the list below. You need to be prepared to answer each of the questions below. Each question will be worth 33.3 points. 

List of Questions: 

1.) Define Antitrust policy. Discuss in detail the three major Antitrust Acts and how they are used to promote competition in the market place. Discuss the pros and cons of using marginal cost pricing and average cost pricing to regulate prices in natural monopolies. 

2.) Discuss the major characteristics of Monopolistic Competition, and provide at least three examples. Distinguish between Monopolistic Competition in the short run vs. the long run by graphically illustrating the firm being profitable in the short run, and graphically illustrate the firm achieving zero-profit equilibrium in the long run. 

3.) Discuss how firms differentiate their products, and provide a specific example for each. Discuss the decision to advertise for each of the four basic market structures. Define a brand name, and provide five examples of recognizable brand names in the market place. 

4.) Graphically illustrate the labor market, and list the factors that can cause the labor supply curve to shift. Discuss the decision to supply labor by incorporating the topic of time allocation. Discuss the opportunity cost of leisure vs. the opportunity of work. Distinguish between the substitution and income effect. 

5.) Define compensating differentials. Define efficiency wages. Discuss the marginal productivity theory of labor. Discuss the role of unions in the labor market. Discuss discrimination in the labor market by providing various examples of wage disparities by gender. 

6.) Differentiate between the poverty threshold and the poverty rate. Identify who the poor are in the United States, and discuss what causes poverty. Discuss antipoverty programs in the United States. 

7.) Define private information, and discuss how private information can distort decisions in the marketplace. Differentiate between Adverse selection and moral hazard and provide examples of each. Discuss how adverse selection can be avoided. Discuss how moral hazard can be avoided.