CB2: Business Economics Exam Prep (CB2)

Classify economic statements as positive or normative by applying the criterion of testability.

Calculate opportunity cost in simple decision-making scenarios.

Plot a production possibility frontier and compute the opportunity cost of moving between points.

Analyse how market, command, and mixed economic systems address the problem of resource allocation.

Construct demand and supply curves from schedules and identify how non-price determinants shift each curve.

Solve for equilibrium price and quantity from linear supply and demand equations, including after curve shifts.

Calculate consumer surplus and producer surplus from supply and demand functions.

Calculate the market effects of price ceilings and price floors, including shortages, surpluses, and deadweight loss.

Calculate price elasticity of demand using point and midpoint methods.

Calculate income elasticity of demand and classify goods as normal, inferior, or luxury.

Calculate cross-price elasticity of demand and classify pairs of goods as substitutes or complements.

Calculate price elasticity of supply and identify factors affecting its magnitude.

Calculate total and marginal utility from a consumption schedule and verify the law of diminishing marginal utility.

Construct a budget line from price and income data and interpret its slope as the relative price ratio.

Construct an indifference curve from a utility schedule and interpret its slope as the marginal rate of substitution.

Solve for the optimal consumption bundle using the tangency condition between an indifference curve and the budget line.

Derive a consumer's optimal consumption bundle by applying the equi-marginal principle (MUx/Px = MUy/Py).

Calculate the new optimal consumption bundle following a change in consumer income.

Decompose the effect of a price change on consumption into its income and substitution effects.

Calculate total product, average product, and marginal product from production data.

Identify diminishing marginal returns from production data and demonstrate its link to rising marginal costs.

Calculate total cost, average total cost, average variable cost, average fixed cost, and marginal cost from cost data.

Plot short-run cost curves and verify that the marginal cost curve intersects the average cost curves at their minimum points.

Calculate long-run average cost at different output levels and identify regions of economies and diseconomies of scale.

Calculate total revenue, average revenue, and marginal revenue from demand data.

Determine a firm's profit-maximising output level by applying the MC = MR condition.

Define the conditions of perfect competition and derive that price equals marginal revenue for a price-taking firm.

Calculate the short-run profit-maximising output and profit for a perfectly competitive firm.

Determine the shut-down price for a competitive firm by comparing price to minimum average variable cost.

Calculate the long-run equilibrium price and output in a perfectly competitive market with free entry and exit.

Define monopoly and identify sources of barriers to entry that create market power.

Calculate the profit-maximising price, output, and profit for a monopolist given demand and cost functions.

Calculate the consumer surplus, producer surplus, and deadweight loss associated with a monopoly equilibrium.

Compare welfare and efficiency outcomes between perfect competition and monopoly using quantitative results.

Calculate the short-run equilibrium price, output, and profit for a monopolistically competitive firm.

Calculate the long-run equilibrium for a monopolistically competitive firm and quantify its excess capacity.

Construct a payoff matrix from a strategic game description to illustrate oligopolistic interdependence.

Explain the kinked demand curve model and its assumptions about rivals' responses to price changes.

Calculate the segmented marginal revenue curve implied by a kinked demand curve.

Calculate profit and consumer surplus under a scenario of first-degree (perfect) price discrimination.

Calculate optimal prices and profits under third-degree price discrimination across segmented markets.

Compute and compare total profit under price discrimination versus a single uniform price.

Calculate optimal prices under a peak-load pricing scheme with differing demand conditions.

Calculate the limit price to deter market entry and identify predatory pricing by comparing price to cost.

Calculate the optimal two-part tariff structure, consisting of a fixed fee and a per-unit price.

Calculate profit-maximising bundle prices and compare the profitability of pure bundling versus separate pricing.

Quantify the deadweight loss resulting from a negative or positive externality.

Determine the socially optimal output level and calculate the required Pigouvian tax or subsidy to correct an externality.

Define public goods and derive the aggregate demand curve by vertically summing individual demand curves.

Calculate the optimal provision level of a public good by applying the Samuelson condition.

Calculate market outcomes in a numerical model featuring adverse selection.

Calculate agent effort and principal payoff in a principal-agent problem with moral hazard.

Calculate the welfare effects of imposing a price cap on a monopoly.

Calculate and compare total abatement costs under tradeable permits versus corrective taxation in a multi-firm scenario.

Calculate GDP using the expenditure, income, and output (value-added) approaches from given data.

Convert nominal GDP to real GDP and calculate the GDP deflator.

Calculate inflation rates from CPI data and explain key differences between price indices.

Calculate the real interest rate using the Fisher equation.

Analyse the wealth redistribution effects of unexpected inflation using numerical examples.

Calculate the unemployment rate and classify unemployment as frictional, structural, or cyclical.

Calculate the inflation-unemployment trade-off implied by a given Phillips curve equation.

Define potential output, calculate the output gap, and identify phases of the business cycle from data.

Calculate opportunity costs to determine comparative advantage in a two-country, two-good model.

Calculate the total gains from trade resulting from specialization and determine the range for mutually beneficial terms of trade.

Calculate the welfare effects of a tariff, including changes in surplus, government revenue, and deadweight loss.

Calculate the welfare effects of an import quota and compare its impact to that of an equivalent tariff.

Calculate the balances of the current, capital, and financial accounts from international transaction data.

Calculate the equilibrium exchange rate in a floating system using supply and demand for foreign currency.

Apply the Marshall-Lerner condition to a scenario and illustrate the J-curve effect on the trade balance.

Calculate the price of a bond given its face value, coupon rate, maturity, and market interest rate.

Model the money market and calculate the equilibrium interest rate from money supply and demand equations.

Calculate the simple money multiplier and the total change in money supply from an initial deposit.

Apply the quantity theory of money (MV = PQ) to calculate the effects of changes in money supply on the price level.

Calculate the impact of various monetary policy tools (open market operations, reserve requirements, policy rate) on the money supply and equilibrium interest rate.

Derive the IS curve algebraically from goods market equilibrium conditions (Y = C + I + G).

Derive the LM curve algebraically from money market equilibrium conditions (M/P = L(Y, i)).

Solve the IS-LM system of equations to find the equilibrium income and interest rate.

Use the IS-LM model to calculate the effects of fiscal and monetary policy changes on equilibrium income and interest rate.

Derive the Aggregate Demand (AD) curve from the IS-LM model and construct short-run and long-run Aggregate Supply (AS) curves.

Use the AD-AS model to calculate the effects of demand-side and supply-side shocks on output and the price level.

Apply the Mundell-Fleming model to compare policy effectiveness under different exchange rate regimes.