Microeconomics... back to testing

[ryoder]

Read the sparknotes site too.
I studied for these with the REA book. Do you have that?
I would recommend it. Instantcert alone is not enough to truly understand most topics that are soft of foreign to you.

Marginal is explained in the REA book. Its all about answering, what happens if I sell/buy/build one more of something.
So the marginal propensity to consume is this, you pay your rent and have your committed expenses paid for. If we take your current obligations and income and add on 300 bucks, what will you do with it? If you spend the whole thing and save none then your MPC is 1, you like to consume things.

If you spend half save half then your MPC is .5. Your MPS is 1/MPC so its the inverse.

Marginal revenue covers how much revenue you get from selling/making one more item.

Marginal revenue product covers how much revenue increase when you increase one factor of production such as hiring an employee.
If you have 3 employees and can produce 100 of something and with 4 employees you can produce 120 of something and 5 employees you can produce 130 of something then the marginal revenue product of the 5th employee is 10 items. Diminishing returns sets in when the MRP of the additional employee is lower than the previous employee. That employee is not producing as much added benefit as the previous employee.

The same can be said for equipment but most of the test questions will be on hiring employees.

You also need to know price elasticity of demand backward, correlational coefficient etc.

Know oligolopolies, monopolies, barriers to entry.

Break even analysis, fixed, variable, total costs, supplier surplus, buyer surplus, be able to look at a graph and tell if the company is a monopoly based on AVC, ATC etc.

These types of questions take practice. I got my practice at speedyprep, REA and sparknotes.

I actually enjoyed economics so maybe that helped but I did study a lot.

Good luck and just make sure to overstudy.