CIA4U1 – Unit 1 Review: Introduction to Economics

CIA4U1 – Unit 1 Review: Introduction to Economics
1. Scarcity and Choice – economic goods are those that are scarce; a free good is one that exists in
sufficient abundance to satisfy everyone’s wants
Economic Models
Positive vs Normative Economics
Stock vs Flow variables
Ceteris Paribus Assumption
Micr o vs Macro
7. Basic Economic Decisions
 What is to be produced?
 How will the commodities be produced?
 Who will get how much?
8. Opportunity Cost – the value of the best available alternative
 Be able to apply the concept to various situations
9. Production Possibilities Curve
 Represents the maximum possible combinations of two commodities that can be produced with
given resources
 Points on the boundary are combinations operating at maximum efficiency
 Points inside the boundary are attainable, but are not maximum combinations
 Points outside the boundary are unattainable given current conditions
 The boundary can be shifted outward due to fundamental changes in current conditions
 Be able to plot curves and place points representing different conditions on the curves
 What is the difference between production and productivity?
10. Economic Systems
 Traditional Economy
 Command Economy
 Market Economy
 How does each type of system address the basic economic questions?
 Mixed Economies
11. Canada’s Economic System
 What are some characteristics?
 Government involvement?
 Compared to other world economies?
12. Political Economies
 Socialism
 Communism
 Capitalism
 Fascism
 How are they defined in terms of economic goals and political decision-making?
 Where does Canada fit?
13. Famous Economists
 Adam Smith
 Karl Marx