Spring 2012 Courses

ECN 5110 – Economic History of the United States
ECN 5150 – Comparative Economic Systems

Economics 1500 students:  Here is the study outline for midterm 2:

Economics 1500H

Study Outline, Second Midterm


I.             Markets and Transportation

                A.            Role of transportation in location of colonial settlements

                B.            Role in transportation in size of marketing area

                C.            Market institutions in early America

                                1.            Market overt

                                2.            Caveat emptor

                D.            Transportation improvements

                                1.            Ocean shipping

                                2.            Turnpikes

                                3.            Canals

                                4.            Steamboats

                                5.            Railroads

                                6.            Automobiles

                                7.            Airplanes

                                8.            Interstate Highway system


II.            Efficiency

                A.            Pareto efficiency and PPF

                B.            Consumer surplus, producer surplus, total surplus

                                1.            Deadweight loss

                C.            Efficiency and the “Invisible Hand” of the market


III.           International Trade

                A.            Gains from specialization and trade

                                1.            Gains from importing

                                2.            Gains from exporting

                B.            Effects on CS, PS, TS of:

                                1.            Tariff

                                2.            Quota

                C.            Arguments in favor of trade restrictions

                                1.            Economic arguments

                                2.            Non-economic arguments


IV.          Measuring Output

                A.            Definitions of GDP and GNP

                B.            Components of GDP:     Y = C+I+G+NX

                C.            Relationships among GNP, NNP, NI, PI, DI

                D.            Conceptual and measurement problems in national income accounting

                                1.            non-market goods and services

                                2.            illegal goods and services

                                3.            measurement error


V.            Measuring the Price Level

                A.            Consumer Price Index

                B.            GDP Deflator

                C.            Steps in constructing the CPI

                D.            Bias in CPI as a measure of the cost of living

                                1.            unaccounted quality change

                                2.            substitution bias

                                3.            new product bias

                E.            Use of the CPI to convert nominal GDP to real GDP

                                1.            COLAS


VI.          Economic Growth

                A.            Rule of 70

                B.            Determinants of economic growth

                                1.            Factors affecting labor productivity growth: A, K/L, N/L, H/L

                                2.            Other factors: political stability, trade openness, etc.

                                3.            Policies to encourage economic growth


VII.         Financial Institutions

                A.            Purpose of financial institutions

                B.            Financial markets

                                1.            Bond market

                                                a.            characteristics of bonds

                                2.            Stock market

                C.            Financial intermediaries

                                1.            banks, credit unions, and other kinds of financial intermediaries

                D.            Market for Loanable Funds Model

                                1.            Determination of long-term interest rates, investment, economic growth

                                2.            Policies to encourage economic growth


VIII.        Unemployment

                A.            Natural rate of unemployment

                B.            Labor force participation rate

                                1.            male, female, changes over time

                C.            Factors affecting natural rate of unemployment

                                1.            wait unemployment

                                2.            search unemployment