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Principles of Microeconomics: At a Glance

Description of the Examination
The Principles of Microeconomics examination covers material that is usually taught in a one-semester undergraduate course in introductory microeconomics. This aspect of economics deals with the principles of economics that apply to the analysis of the behavior of individual consumers and businesses in the economy. Questions on this exam require test-takers to apply analytical techniques to hypothetical as well as real-world situations and to analyze and evaluate economic decisions. Test-takers are expected to demonstrate an understanding of how free markets work and allocate resources efficiently. They should understand how individual consumers make economic decisions to maximize utility, and how individual firms make decisions to maximize profits. Test-takers must be able to identify the characteristics of the different market structures and analyze the behavior of firms in terms of price and output decisions. They should also be able to evaluate the outcome in each market structure with respect to economic efficiency, identify cases in which private markets fail to allocate resources efficiently, and explain how government intervention fixes or fails to fix the resource allocation problem. It is also important to understand the determination of wages and other input prices in factor markets, and to analyze and evaluate the distribution of income. The examination contains approximately 80 questions to be answered in 90 minutes. Some of these are pretest questions that will not be scored.

Property rights and the role of incentives Marginal analysis 55–70% The Nature and Functions of Product Markets 15–20% Supply and Demand • Market equilibrium • Determinants of supply and demand • Price and quantity controls • Elasticity • Price, income and cross-price elasticities of demand • Price…...

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