ECON1101: Feedback for

Learning (Test)
Feedback for Learning Chapter 1:

Opportunity cost
Comparative advantage- if your opportunity cost to produce a good is
lower than others
Principle of comparative advantage- everyone is better off if each agent is
producing according to their comparative advantage
Specialisation
Price of trade- price of bananas is equal or greater than the cost of
collecting bananas
o Price of bananas is greater than or equal to Alberto's OC bananas
o Price of bananas is less than or equal to OC of bananas
What are the allowable prices for this kind of trade
Principle of Increasing Opportunity Cost- In the process of increasing the
production of any good, first employ those resources with the lowest
opportunity cost and only once these are exhausted turn to resources with
higher cost.
Main factors driving economic growth
o Infrastructure
o Population
o Technology
Economic welfare depends on consumption
Consumption Possibility Curve

Feedback for Learning Chapter 2:

Remember definitions for supply

Shutdown condition (short term)
Shutdown condition (long term)

Feedback for Learning Chapter 3:

Quantity Demanded
Substituition effect and income effect will be major part of the exam
Pg 22 demand notes- shifts in demand curve