Below are a bunch of resources that I think are helpful for ECO 105 students. If you have any questions come to an SI session or leave a comment below. You can also upload any of your helpful resources in the comment section!
Final exam is next week on Wednesday (6/8). Start studying now!
Here are some charts to help you more easily remember the different types of markets:
Importance of knowing cost curve formulas:
It is extremely important to know the various cost curve formulas that we have been going over in class and to know the various relationships between the curves. You will need to have these memorized before the final exam so try and go over them for five minutes everyday or every couple of days. It will really help you on the final exam. Here is a quick review of the formulas:
MC=Change in TC/Change in Q (Remember that MC is also just the change in VC as well)
MR=Change in TR/Change in Q
TR=P * Q
- Whenever you are doing something having to deal with marginal, whether it’s MC or MR, just remember it always has to do with the CHANGE in something over the CHANGE in something else.
- ATC can also be found by doing (FC+VC)/Q or AFC+AVC
This Monday is your midterm exam! Here are some tips.
- Rewrite your notes and rework the examples without looking at the answers. Once you have done that, see what you have done right and wrong. Seek help for what you have gotten wrong and do not understand.
- Go over homework problems.
- Go to office hours, SI, and tutoring to get help with an concepts you do not understand.
- Utilize online resources such as www.khanacademy.com
Test Taking Tips:
1. If you do not understand a problem, skip it and go back. Don’t take away time from other problems that you are sure you know the answer to.
2. Check your work to avoid any silly mistakes.
3. Stay calm! I know this is easier said than done, but it can really be helpful once you are able to master it.
4. If you don’t understand what a question is asking, seek clarification so you are sure you are answering the question.
GOOD LUCK ON YOUR TEST THIS WEEK!
Price Elasticity of Demand:
Goods with elastic demand (When quantity demanded responds substantially to changes in the price):
- Goods with close substitutes because it is easier for consumers to switch from that good to others.
- Narrowly defined markets (ex: market for ice cream)
- Goods tend to have a more elastic demand over a longer time horizon.
Goods with inelastic demand (When quantity demanded responds only slightly to changes in the price):
- Broadly defined markets (ex: food-because it is hard to find a substitute)
Price Elasticity of Demand:
How strongly quantity demanded reacts when price changes.
Price Elasticity of Demand:
%Change in Quantity/%Change in Price
Income Elasticity of Demand (keep the +/- sign):
%change in Quantity Demand/ % Change in Income
Note: If the income elasticity of demand is positive, then it’s a normal good; if the income elasticity of demand is negative, it is an inferior good.
Cross-Price Elasticity of Demand (Keep the +/- sign):
%Change in Quantity Demanded of Good 1/ % Change in Price of good 2
Note: If the two goods have a positive cross-price elasticity, then they are substitutes; if the two goods have a negative cross-price elasticity, then they are complements
Price Elasticity of Supply:
%Change in quantity supplied/ % Change in price
Perfectly Elastic and Perfectly Inelastic Demand Curves:
Perfectly Elastic Demand Curve: A trick to remember this is that it kind of looks like a capital “E”
Perfectly Inelastic Demand Curve: A trick to remember this is that it goes straight up and down just like a capital “I”
The perfectly inelastic and elastic supply curves would look the same as the demand curves do, expect we would be talking about supply.
I hope this little review helps and please let me know if you have any questions! Good luck!
Post #4-Supply & Demand
In class we discussed the supply and demand model. Both the supply and demand curves can shift and below I have listed the reasons that these curves shift.
Different reasons that the demand and supply curves shift:
Price of related goods (substitutes and complements) (Ex: If the price of hot dogs increases, you will demand less hot dog buns)
Expectations (Ex: If you expect the price of something you rise in the future, you will demand more now)
Tastes/Preferences (Ex: If you read a health study that eating more fruit will make you live longer, you will buy more fruit)
Change in Income (Normal and Inferior Goods) (Ex: If your income decreases, you will demand less luxury goods)
# of Buyers: (Ex: If there are more buyers in the market, then demand will increase)
# of suppliers (Ex: If the number of suppliers in a market increases, supply will increase)
Change in Technology (Ex: If a company figures out how to make a product cheaper, then they will be able to produce more and supply will increase)
Prices of Other Goods (Ex: If another good is more expensive, then a producer will supply more of the more expensive good in order to make a greater profit)
Change in Input Prices (Ex: If the price of a product input increases, which means it will be more expensive to produce a good, then supply will decrease)
Natural Occurrences (Ex: If a fire occurs in a field of wheat, the supply of wheat will decrease)
*Tip: Remember to not think of shifting the curves up or down, but rather left and right. Think of shifting the curves in terms of a number line: If demand goes up, then you are shifting the demand curve to the right.
If supply goes up, then you are shifting the curve to the right as well.
Post #3-Gains from Trade
Absolute Advantage: Uses FEWER resources
Comparative Advantage: Lower opportunity cost
Opportunity Cost: What you give up to get the next best thing.
Here are some videos that will help explain these concepts in more detail.
https://www.youtube.com/watch?v=xx9xNJlPOJo&list=PLF12F094191608982&index=6 (watch this one first)
https://www.youtube.com/watch?v=xN3UV5FsBkU&index=7&list=PLF12F094191608982 (then watch this one)
The PPF (Production Possibilities Frontier) is a graph that shows the trade offs between two goods in an economy. We only have so many resources so when we produce more of one good it automatically means we produce less of another. There are some important points to know about the PPF and I’ve listed them below.
Points A, B, and C are all ON the frontier. This means that they are efficient AND attainable. Both of these should be used to describe these points.
Point X is INSIDE the frontier which means it is ATTAINABLE, but NOT efficient. We are able to produce at this point, but it means we are NOT using all of our resources. This might mean that this economy is in a recession.
Point Y is OUTSIDE the frontier which means that it is NOT attainable. We are not currently able to produce at point Y. If we acquire more resources (maybe through something like immigration–more labor), then we will be able to produce at point Y, but for now it is NOT attainable.
If you understand the differences between these points on the graph, then you should have a great grasp on the PPF.
Post #1-Welcome to SI!
Hi Class! Just wanted to give a quick intro to myself and the SI program.
My name is Katherine Boukidis and I am a senior (graduating in June!) Economics major and finance minor. I have been doing SI for three years now and even supported Prof. Krautman’s course one time. I feel very confident in the material and that I will be able to help you all succeed.
More about SI…
SI is a FREE and anonymous (meaning I don’t know your grades and the Prof. doesn’t know whether or not you come) resource that is available to you through this course. In SI we will focus on the most challenging topics and work collaboratively towards a better understanding. I will come up with exercises and practice problems that I feel will best help you succeed in this course. If you feel you are already struggling a little, then come to SI sooner rather than later so that we can fix any confusion. I hope I see many of you throughout the quarter and I can’t wait to work with you! Here is a reminder of the schedule:
SI Sessions (I will have material prepared):
Tuesdays: 10-11 AM, LPC, JTR Library Room 105
Wednesdays: 12-1 PM, Loop, C105 (This is right after our class!)
SI Office Hour (Just stop on by and ask questions):
Thursdays: 11-12, LPC, JTR Library Room 105
Here is a helpful video that will help you review what we have been covering the past few classes as well as some important definitions below:
This will help you with differing between costs of productions:
Variable Costs: Depend on how much Q is produced.
Fixed Costs: The same no matter how much Q is produced.
Short Run: There are fixed AND variable costs.
Long Run: All costs are variable (because there is time to adjust).
Videos and Handouts
Post #4-Midterm Review
Your midterm is on Thursday, February 4. I am posting the PPT from my midterm review session so that everyone is able to benefit, even those who were unable to attend. I believe that it is pretty comprehensive, but please let me know if you have any questions. Here is the link: https://docs.google.com/presentation/d/1JVLYX7eKzl-hh4jd2Tw_yqRs9xYlyZ8R7-0mZVInhqs/pub?start=false&loop=false&delayms=3000 Good luck!
Post #2-Opportunity Cost & Comparative Advantage
This week we talked a lot about opportunity cost. An easy way to think of opportunity cost is to say “what do I have to give up to get something else?” What do you have to give up to go to class? Is it sleeping, eating, going to the gym? Everything you do means you are not doing something else.
We use opportunity cost to help us decide who has the comparative advantage in doing something. The person that has a comparative advantage will give up less to perform a task, meaning they are relatively better (lower opportunity cost).
*Remember: When solving these problems we use the Input Opposite Under (IOU) method for input problems and the Output Opposite Over (OOO) for output problems.
Here is an example for you to work out! (Email for answers)
- Who has the absolute advantage in cookies? Cakes?
- Who has the comparative advantage in cookies? Cakes?
- (Hint: Find the opportunity cost of each first!)
|# of Cookies||# of Cakes|
|Jerry||10 cookies||5 cakes|
|Tom||20 cookies||10 cakes|
First let me introduce myself. My name is Katherine and I am a senior Economics major, Finance minor. I took ECO 105 my freshman year, and this will be my 6th time being an SI Leader for ECO 105. 3 of those times have been for Professor Bucci, so I know her teaching style fairly well. Please always feel free to reach out to me with any questions or concerns you may be having, I’m always happy to help! Can’t wait to see you all at sessions next week!
Here are a couple of important pieces of information from my presentation in class along with the schedule below:
1. SI is FREE–so take advantage of it!
2. SI is all about collaborative learning so along with me and your fellow classmates we will work together so you can better learn the material and prepare for exams.
3. SI starts in Week 2 (January 12 will be the first session)
4. I will be attending each and every class along side you guys so I will know exactly what is being covered and gauge what people are struggling with.
5. For more SI information, please check out the following sources:
Tuesday 10:30-11:30am, DePaul Center C105
Wednesday 4-5pm, Richardson Library 105
Office Hour – Thursday 3-4pm, DePaul Center C105
Can’t attend any of my sessions? Feel free to check out other ECO 105 SI leaders’ schedules here.
Tips for Studying Economics:
1. Draw graphs…ALWAYS!
2. Try and rewrite your notes in a way that makes the most sense to you.
3. Do as many practice problems as you can.
4. Really try and think through the problems because you will find that a lot of the concepts are quite logical to think through.
Here are some resources from Fall 2015
Hey Everyone! Here is a link to a video that will help explain monopolies. This will help you review for the final and give you some extra practice.
Also, remember that I will be having a review session on Wednesday, 11/18 from 9-10 AM in JTR 105. Please come if you can and if not, please feel free to email me with questions.
Post #7-Practice Quiz Review Problems
I made a practice quiz to help you study for tomorrow’s quiz. Please use this as one of your many study tools, but also do your other review as well. Good luck!
Post #6-Substitution and Income Effects
This week in class we learned about the substitution and income effects. Here is an example to help you remember them:
EX: If the price of corn goes down, and corn is a normal good:
- Substitution Effect: buy MORE corn because it is cheaper now.
- Income Effect: When the price of corn goes DOWN, your REAL income goes UP
- Corn is a normal good: buy MORE
- If corn was an inferior good: buy LESS
Here is a chart to make it easier: (For when price goes DOWN)
|Substitution Effect||Buy MORE||Buy MORE|
|Income Effect||Buy MORE||Buy LESS|
|Total Effect||Buy MORE||Buy MORE*|
*For inferior goods, the substitution effect is greater.
Post #5-Elasticity Review
Elasticity can be tricky for many students. Here are some videos that help explain the different types of elasticity.
Price Elasticity of Demand: https://www.khanacademy.org/economics-finance-domain/microeconomics/elasticity-tutorial/price-elasticity-tutorial/v/price-elasticity-of-demand
Cross Price Elasticity of Demand: https://www.khanacademy.org/economics-finance-domain/microeconomics/elasticity-tutorial/price-elasticity-tutorial/v/cross-elasticity-of-demand
Price Elasticity of Supply: https://www.khanacademy.org/economics-finance-domain/microeconomics/elasticity-tutorial/price-elasticity-tutorial/v/elasticity-of-supply
Income Elasticity of Demand: https://www.youtube.com/watch?v=LHv4SnEUcZA
Hope this helps and good luck on the midterm!
Post #4-Midterm Review
Hey Everyone! Here is a midterm review I made to give a little more practice. I posted the questions and answers, but please email if anything make sense or you believe there is an error in my answer key. Good luck!