What is:

• The formulation of Demand and Supply - what does each side of the market represent; what does market equilibrium establish
• Difference between a product market and a factor market
• Difference between a price determinant of demand/supply and a non-price determinant
• Purpose of the price system
• How market price and quantity respond to a shortage and a surplus
• Steps required to frame and opportunity cost
• Ethical boundaries for an economist: restricted to providing the opportunity cost of what people want
• Character of elasticity in health care markets
• Definitional measures of elasticity: >1 is elastic; <1 is inelastic; =1 is unitarily elastic
• Kinds of elasticity measured: price elasticity, income elasticity, cross-price-elasticity
• Recognize definition/properties of the several Market Structures: Perfect Competition, Monopolistic Competition, Monopoly, Oligopoly, Monopsony, Oligopsony
• Definition of product differentiation, the most common competitive strategy
• Most important differences between a price-competitive market and a concentrated market
• What is a conditional probability
• When is Expected Valuation used in economic valuation
• Recognize the definition of a "fair premium" in insurance
• Recognize the definition of a "rated premium" in insurance
• Recognize things that distort the fair premium in an insurance market: adverse selection, moral hazard, small group variance
• Justification(s) in economic theory for some kinds of government interference in markets
• Allocative Efficiency and Pareto Efficiency (different ways of saying almost the same thing; lead to the same conclusion about a market)
• Most common violations of a free market: barriers to entry, externalities, imperfect information, arbitrary government intervention
• Violations of free market seen in health care markets: High fixed cost, proprietary diagnostics and treatment, licensing
• Utility maximization as the goal of the consumer
• Benefits can be measured as costs that are avoided in cost-benefit analysis