UNIT 1: ECONOMICS REVIEW
What is
Economics?
Economic
Concepts
Economic
Systems and
Goals
Capitalism
and
International
Trade
Production
Possibilities
Curve
100
100
100
100
100
200
200
200
200
200
300
300
300
300
300
400
400
400
400
400
500
500
500
500
500
100
Q: The condition that results from
society not having enough resources
to produce all the things people would
like to have.
100
A: Scarcity
200
Q: “THERE IS NO SUCH THING AS A
FREE LUNCH” focuses on what major
concept?
200
A: A cost must be factored in to all
decision-making
300
Q: What are the three basic questions
we must answer about the ways our
limited resources will be used?
300
A: 1. WHAT to produce
2. HOW to produce
3. FOR WHOM to produce
400
Q: NAME and DESCRIBE the four
Factors of Production.
400
A: 1. Land-refers to the “gifts of nature,” or
natural resources.
2. Capital-the tools, equipment, machinery, and
factories used in the production of goods and
services.
3. Labor-people with all their efforts, abilities,
and skills.
4. Entrepreneurs-a risk-taker in search of
profits who does something new with existing
resources.
500
Q: Economics is the study of human efforts to
satisfy what appear to be unlimited and
competing wants through the careful use of
relatively scarce resources. As such, it is a
social science because it deals with the
behavior of people as they deal with this basic
issue. There are four key elements to this study.
NAME and DESCRIBE these elements.
500
A: 1. Description-Gross Domestic Product (GDP)-the dollar
value of all final goods and services, and structures
produced within a country’s borders in a 12 -month period
2. Analysis-answers the questions…Why are price of some
items high whole others are low? Why do some people
earn higher incomes than others? How do taxes affect
people’s desire to work and save?
3. Explanation-A way to communicate knowledge
determined through analysis to others to create a common
understanding
4. Prediction-The study of economics can help to make the
best decision in various situations . The study of what is or
what tends to be can help predict what may happen, as
well as likely consequences of different courses of action.
100
Q: Describe the difference between a
consumer goods and capital goods.
100
A: Consumer goods-intended for final
use by individuals
Capital goods-used to produce other
goods and services
200
Q: Define Wealth
200
A: the accumulation of those products
that are tangible, scarce, useful, ad
transferable from one person to
another.
300
Q: DEFINE and PROVIDE AN EXAMPLE
for the Paradox of Value
300
A: Describes the contradiction between
necessities and value.
The situation where some necessities, such as
water, have little monetary value, whereas
some non-necessities, such as diamonds, have
a much higher value. Describes the
contradiction between necessities and value.
400
A: Which part of the circular flow
model deals with individuals selling
land, labor, capital, and entrepreneur
abilities to the businesses for
income?
400
A: Factor Markets
500
Q: Division of Labor and
Specialization can improve
productivity. Define these two factors.
500
A: Division of Labor – work is
arranged so that individual workers
do fewer tasks than before.
Specialization – when factors of
production perform the tasks they can
do relatively efficiently.
100
Q: Describe Economic Security as a
social goal.
100
A: Protection from such adverse economic
events as layoffs and illness. States have set up
funds to help workers who lose heir jobs. Many
employers have insurance plans to cover the
injuries and illnesses of their workers. On the
national level, Congress has set up Social
Security which is a federal program of disability
and retirement benefits that covers most
working people.
200
Q: Name and provide an example for
each type of economic system.
200
A: 1. Traditional, Command, and
Market Economies
300
Q: Name all 8 economic and social
goals.
300
A: 1. Economic Freedom
2. Economic Efficiency
3. Economic Equity
4. Economic Security
5. Full Employment
6. Rice Stability
7. Economic Growth
8. Future Goals
400
Q: Name 2 total advantages and
disadvantages of a traditional
economic system.
400
A: Advantages: 1. Sets forth certain economic
roles for all members of the community. 2.
Stable, predictable, and continuous life.
Disadvantages: 1. Discourages new ideas and
new ways of doing things 2. Stagnation and
lack of progress 3. Lower standard of living
500
Q: Name 3 total advantages and
disadvantages of a command
economic system.
500
AQ: Advantages: 1. Capable of dramatic change in a
short time 2. many basic education, public, health,
and other public services available at little or no cost
Disadvantages: 1. Does not meet wants and needs of
consumers
2. Lacks effective incentives to get people to work 3.
Requires large bureaucracy, which consumes
resources
4. Has little flexibility to deal with small, day -to-day
changes 5. New and different ideas discouraged, no
room for individuality
100
Q: DEFINE and COMPARE a protective
and revenue tariff.
100
A: 1. Protective Tariff- a tariff high
enough to protect 2. Revenue Tariff- a
tariff high enough to generate
revenue for the government without
prohibiting imports
200
Q: Name the five characteristics of a
“Free Enterprise” or Capitalist system.
200
A: 1. Economic Freedom 2. Private
Property Rights 3. Voluntary Exchange
4. Profit Motive 5. Competition
300
Q: List at least three other types of
barriers to trade other than a tariff or
a quota.
300
A: 1. Heavier Health Inspections 2.
Licenses to import 3. Health issues
(i.e. Some countries refuse to import
genetically altered crops.) 4.
Nationalism
400
Q: What is NAFTA stand for and
describe it gain goals and outcomes.
400
A: The North America Free Trade
Agreement is an agreement to liberalize
free trade by reducing tariffs among the
three major countries of Canada, Mexico,
and the United States. Main gals are to
stimulate economic growth and provide a
variety of products to all nations involved.
500
Q: Name and provide an example for
the four Roles of Government in a
Free Enterprise System.
500
A: 1. Protector (Enforces laws against false and
misleading advertising, unsafe food and drugs,
environmental hazards, unsafe automobiles, and laws
against individual freedoms.) 2. Provider and
Consumer (Defense services, education, public
welfare, parks, libraries, and bus services.)3.
Regulator (Preserving competition in the market place,
interstate commerce, communications, and eve entire
industries such as baking and nuclear power.) 4.
Promoter of National Goals (Reflects the will of the
majority. i.e. social goals)
100
Q: Define a trade-off
100
A: Alternative choices, whenever an
economic decision is made.
200
Q: The Production Possibilities Curve
is a popular model that economists
use to illustrate what major concept?
Define this concept.
200
A: Opportunity Cost-the cost of the
next best alternative use of money,
time, or resources when one choice is
made rather than another
300
Q: Draw a Productions Possibilities
Frontier Curve on the board and
label.. (A.) Maximum production
(efficient) (B.) Inefficiency (C.)
Economic Growth (not possible given
out current resources)
300
A:
400
Q: Define both Absolute and
Comparative Advantage
400
A: 1. Absolute Advantage-when a
country can produce a product more
efficiently (with greater output per
unit of input) than another country
2. Comparative Advantage-when a
country can produce a product
relatively more efficiently, or at a
lower opportunity cost.
500
Q: Using the graph to be drawn on the
board, determine who has the
absolute and comparative
advantages.
500
A: