Learning Objective: 01-02 Describe the role of economic theory in economics.
Learning Objective: 01-03 Distinguish microeconomics from macroeconomics and positive economics from normative economics.
Learning Objective: 01-04 Explain the individuals economizing problem and how tradeoffs; opportunity costs; and attainable combinations can be illustrated with budget lines.
Learning Objective: 01-06 Apply production possibilities analysis; increasing opportunity costs; and economic growth.
Learning Objective: 01-07 Explain how economic growth and international trade increase consumption possibilities.
Learning Objective: 01-08 (Appendix) Understand graphs; curves; and slopes as they relate to economics.
Learning Objective: 02-01 Differentiate between laissez-faire capitalism; the command system; and the market system.
Learning Objective: 02-02 List the main characteristics of the market system.
Learning Objective: 0203 Explain how the market system answers the five fundamental questions of what to produce; how to produce; who obtains the output;
how to adjust to change; and how to promote progress.
Learning Objective: 0204 Explain the operation of the "invisible hand" and why market economies usually do a better job than command economies at efficie
ntly transforming economic resources into desirable output.
Learning Objective: 02-05 Describe the mechanics of the circular flow model.
Learning Objective: 03-02 Describe demand and explain how it can change.
Learning Objective: 03-04 Relate how supply and demand interact to determine market equilibrium.
Learning Objective: 03-05 Explain how changes in supply and demand affect equilibrium prices and quantities.
Learning Objective: 03-06 Identify what government-set prices are and how they can cause product surpluses and shortages.