Transcript Economics Final Sides Game

Economics Final Sides Game
Page 1 of review guide
Branch of economics concerned with
individual firms
• microeconomics
This exists when resources are limited
• scarcity
Branch of economics concerned with
aggregate supply and demand
The next best alternative; given up
when deciding to do one thing over
another
• Opportunity cost
“Anywhere” buyers and sellers meet
for transactions
• markets
Government answers economic
questions
• Command economy
Buyers and sellers answer economic
questions
• market
3 economic questions
• What, how, and for whom to produce
Best measured by per capita GDP or
average income
• Standard of living
Carrot and sticks
• incentives
A non-tangible “good”
Study of the use of limited resources
and unlimited wants and needs
• economics
Four factors of production
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Land- natural resources
Labor- workers
Capital- man-made (tools and equipment)
Entrepreneurship- ideas and risk
Page 2 of review guide
Ability to out produce= ____ advantage
• absolute
Ability to produce at lower
opportunity cost = ____ advantage
• comparative
When more of one thing requires less
of another
• Trade-off
When more of one thing does not
require less of another
• Free lunch
See PPF handout
See S + D handout
Page 3 of review guide
A maximum price
• ceiling
Minimum wage is an example of a
• floor
Illegal markets that defy price controls
• Black markets
C + I + G + NX
• GDP
When real GDP decreases for 6
months, unemployment rises, and
spending decreases
• recession
When GDP is increasing
• expansion
16+ working or seeking employment
• Labor force
Unemployed due to lack of skill or
undesirable skill
• structural
Unemployment due to recession
• cyclical
Measure of inflation based on price
change of a “fixed basket” of goods
• CPI
Pollution from a factory is an example
• Negative externality
Increase in customers to surrounding
businesses is an example of
• Positive externality
Largest variable in GDP/Largest sector
of the economy
• Consumer spending/consumer sector
Smallest variable in GDP/Largest sector
of the economy
• Net Exports/Foreign
Page 4 of review guide
Owned by stockholders
• corporation
Most prevalent business type
• Sole proprietorship
Subject to double taxation
• corporation
Least common business type
• partnership
A few firms dominate industry
• oligopoly
Many firms selling IDENTICAL products
• Perfect competition
Many firms selling differentiated (but
similar)products
• Monopolistic competition
Give an example of a monopoly
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PPL
PA wine and spirits
Post office
DeBeers (back in the day)
Page 5 and 6 of review guide
• These were recent