ECON 100 Test No 2 Topics

St. Charles Community College
ECON 100   Survey Economics
Spring Semester 2011

Subjects To Be Covered On Test No. 2


  • What is the “law of diminishing returns”, and how does that concept apply to the study of economics? 
  • What is meant by “marginal product”? 
  • What is a “profit maximizing” firm? 
  • What are the features of a firm in perfect competition? 
  • Differentiate among firms operating in perfect competition, monopolist competition, and monopoly. 
  • Why are production costs and selling costs higher for firms in monopolistic competition than for firms in perfect competition? 
  • What is a natural monopoly? 
  • What is meant by the term “market power”? 
  • In class we said that monopolies can be “fragile”.  What is meant by that statement? 
  • What is meant by the term “barriers to entry”? 
  • Why do we regulate utilities? 
  • How is supply and demand determined in the labor market? 
  • Given the marginal product of labor, how are hiring decisions made? 
  • How is unemployment determined?
  • What are the types of unemployment?
  • How do we calculate unemployment? 
  • What are the weaknesses in the determination of unemployment? 
  • What are the issues in the minimum wage controversy? 
  • What is the difference between private goods and public goods? 
  • What is the difference between private or market costs and social costs?
  • What is an economic externality? 
  • What is meant by the term “internalizing externalities”?