Unit 1 study guide – Test will be 50 multiple choice questions and 3-5 short response questions 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. 16. 17. 18. 19. 20. 21. 22. 23. 24. 25. 26. 27. 28. 29. 30. 31. 32. 33. 34. 35. 36. 37. 38. 39. 40. 41. 42. 43. What are the four factors of production? Give examples What is GDP? How is it different that per capita GDP? What is the definition of economics? What is the difference between marginal, fixed, variable, and total cost? What is a cost-benefit analysis? What are the characteristics of a traditional, command and market economies? What is the difference between needs and wants? What is the difference between capital and capital goods? What is division of labor? What is specialization and how does it affect America today? Who developed the theory of communism? What is communism? What is scarcity? Who does it affect? What are some examples of command economies around the world? Why is the United States a mixed economy? What things does the government interfere free enterprise? How does competition help the economy? What is the difference between opportunity cost and trade-offs? What is comparative advantage? Who was Adam Smith and what book did he write? What term did he create that meant little to no government interference? What is voluntary exchange? A drought will cause the supply curve of vegetables to shift which way? Why? A legal maximum price at which a good can be sold is called what? According to the Law of Demand, quantity demanded goes up as price moves? Why? According to the Law of Supply, if price increases, supply does what? Why? What is the diminishing marginal utility? As more suppliers enter the market, what happens to supply? Why? Be able to identify the supply and demand graph and equilibrium point. Demand can only occur when a buyer is what? If a good is a luxury, demand for the good would tend to be elastic or inelastic? Why? If a sin tax is placed on sales of alcohol, what will happen to supply? If an item is a substitute it is defined as elastic or inelastic? If quantity supplied is greater than quantity demanded, will there be a shortage and surplus? If two products are commonly used together, they are considered what? How does the change in the price of one of these products affect the other? Minimum wage is an example of either price floor or price ceiling? Putting capital into a business in hopes of profit would be found in what type of economy? What are characteristics of an elastic product? What are the characteristics of an inelastic product? What determines price? What will happen to price in a shortage? List and explain the 3 types of monopolies. What is an oligopoly? What is competition? Competition has what effect on price? List and explain the 3 types of mergers.