Unit 1: Fundamental Concepts. Types of Economic Systems. Types of Economic Systems

Save this PDF as:
 WORD  PNG  TXT  JPG

Size: px
Start display at page:

Download "Unit 1: Fundamental Concepts. Types of Economic Systems. Types of Economic Systems"

Transcription

1 Unit 1: Fundamental Concepts 1-2 Economic Systems 1 Ch. 2 Types of Economic Systems An economic system is the way in which a society uses its resources to satisfy its people s unlimited wants. An economic system determines: what to produce how to produce for whom to produce 2 Ch. 2 Sec. 1 Types of Economic Systems TYPE 1: Traditional Economy Traditional economy centers on families, clans, or tribes decisions are based on customs and beliefs Everyone has a set role; no chance of deviating from pattern Good of the group always comes before individual desires TYPE 2: Command Economy Command economy government makes economic decisions determines what to produce; how to produce; who gets products Wants of individual consumers rarely considered Government owns means of production 3 Ch. 2 Sec. 1 1

2 Types of Economic Systems TYPE 3: Market Economy Market economy driven by choices of consumers and producers Consumers, producers benefit each other when they act in self-interest 4 Ch. 2 Sec. 1 Government Controls Centrally planned economy government makes all decisions Central government exerts great control determines businesses to operate, amount produced each month determines who is employed, work hours, pay scales 5 Ch. 2 Sec. 2 Government Controls Karl Marx influenced some societies to adopt command economies Marx lived during Industrial Revolution Argued factory owners used workers as resource exploited workers by keeping wages low to increase profits workers would rebel, establish classless society Wrote The Communist Manifesto (with Friedrich Engels), Das Kapital 6 Ch. 2 Sec. 2 2

3 Government Controls Socialism an economic system in which the government owns some or all of the factors of production Authoritarian Socialism economic system in which the government owns all the factors of production and there is little or no political freedom Also called communism Democratic Socialism is established under democratic political process government owns basic industries other industries private central planners make decisions for government-owned industries 7 Ch. 2 Sec. 2 Command Economies Today No pure command economies today Some economies still have mostly command elements In theory, command systems fair to everyone; In practice, many disadvantages central planners do not understand local conditions workers have little motivation to be productive or conserve resources artificially low prices lead to shortages people sacrificed to carry out centrally planned policies 8 Ch. 2 Sec. 2 Fundamentals of a Market Economy Market place or situation where people buy and sell goods, services There are 5 features to a market economy FEATURE 1: Private Property and Markets Private property rights right to own businesses and resources Property means material objects, money, intellectual property, labor 9 Ch. 2 Sec. 3 3

4 Fundamentals of a Market Economy FEATURE 2: Limited Government Involvement Laissez faire government should not interfere in economy Capitalism system having private ownership of factors of production 10 Ch. 2 Sec. 3 Fundamentals of a Market Economy FEATURE 3: Voluntary Exchange in Markets Voluntary exchange traders believe they get more than they give up In market economy, most trade is exchange of product for money 11 Ch. 2 Sec. 3 Fundamentals of a Market Economy FEATURE 4: Competition and Consumer Sovereignty Competition sellers efforts to get business by offering best deal Consumer sovereignty buyers choose products, control what is produced 12 Ch. 2 Sec. 3 4

5 Fundamentals of a Market Economy FEATURE 5: Specialization and Markets Specialization people concentrate their efforts in the activities they do best encourages efficient use of resources leads to higher-quality, lower-priced products 13 Ch. 2 Sec. 3 Circular Flow in Market Economies Circular flow model illustrates how interactions occur in a market Represents the two key decision makers: households, businesses Shows the two markets where households and businesses meet 14 Ch. 2 Sec. 3 Circular Flow in Market Economies Product market market where goods and services bought and sold includes all purchases by individuals from businesses Factor market market for the factors of production land, labor, capital, entrepreneurship Individuals own all factors of production 15 Ch. 2 Sec. 3 5

6 Circular Flow Model 16 Circular Flow Model 17 Impact of Market Economies Advantages Individuals free to make economic choices, pursue own work interests; political freedom Locally made decisions mean better use of resources Profit motive ensures resources used efficiently, rewards hard work 18 Ch. 2 Sec. 3 6

7 Impact of Market Economies Disadvantages Pure market economy has no way to provide public goods and services Does not give security to sick or aged 19 Ch. 2 Sec. 3 Today s Mixed Economies Mixed economy has elements of traditional, command, market systems Most economies emphasize one type; U.S. basically has market system Many European countries greater mix of market and command elements 20 Ch. 2 Sec. 4 7

Market Economies. Fundamentals of a Market Economy

Market Economies. Fundamentals of a Market Economy SECTION 3 Market Economies OBJECTIVES KEY TERMS TAKING NOTES In Section 3, you will describe what a market is and how it works identify the main features of a market economy analyze how the circular flow

More information

CHAPTER 2: THE MARKET SYSTEM AND THE CIRCULAR FLOW

CHAPTER 2: THE MARKET SYSTEM AND THE CIRCULAR FLOW CHAPTER 2: THE MARKET SYSTEM AND THE CIRCULAR FLOW Introduction The problem of scarcity forces societies to make choices about what to produce, how to produce those goods, and who will receive the goods

More information

Chapter 2: Economic Systems

Chapter 2: Economic Systems Chapter 2: Economic Systems 1. Answering three Economic Questions? 2. The Free Market 3. Centrally Planned Economics 4. Mixed Economics Free Market Economy Command, or Central Authority Economy Market

More information

Economic Systems and Decision Making

Economic Systems and Decision Making Class: Date: Economic Systems and Decision Making Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. A great variety of goods and services is

More information

ECON 1100 Global Economics (Fall 2013) Economic Systems: Capitalism versus Socialism

ECON 1100 Global Economics (Fall 2013) Economic Systems: Capitalism versus Socialism ECON 1100 Global Economics (Fall 2013) Economic Systems: Capitalism versus Socialism Relevant Readings from the Required Textbooks: Economics Chapter 3, Economic Systems: Capitalism versus Socialism Definitions

More information

Answer the next question(s) using the following data which show all available techniques for producing 20 units of a particular commodity:

Answer the next question(s) using the following data which show all available techniques for producing 20 units of a particular commodity: Pre-Test Chapter 2 ed17 1. "Under central planning, some group has to decide how to get the necessary inputs produced in the right amounts and delivered to the right places at the right time. This is a

More information

Opportunity Cost the next best alternative given up when a choice is made Incentive- a reason for doing something.

Opportunity Cost the next best alternative given up when a choice is made Incentive- a reason for doing something. AP Macroeconomics Unit 2 Lesson 1: Key Idea: The study of economics exists because of scarcity. Scarcity forces us to choose between various alternatives (trade-offs). All choices have costs (opportunity

More information

TEST on SOL: CE.11 Economic Concepts 40 Questions

TEST on SOL: CE.11 Economic Concepts 40 Questions TEST on SOL: CE.11 Economic Concepts 40 Questions 1. Scarcity means that A. there is plenty for everyone. B. inflation is up. C. supply and demand are at market equilibrium. D. we are unable to satisfy

More information

Chapter 6:Economies in Transition Economic systems: is a set of institutions for allocating resources and making choices to satisfy human wants.

Chapter 6:Economies in Transition Economic systems: is a set of institutions for allocating resources and making choices to satisfy human wants. Chapter 6:Economies in Transition Economic systems: is a set of institutions for allocating resources and making choices to satisfy human wants. Resource allocation is the assignment of resources to specific

More information

Traditional Economies: Decision Making by Custom. Who Gets What? How Do Societies Decide? (HA)

Traditional Economies: Decision Making by Custom. Who Gets What? How Do Societies Decide? (HA) Who Gets What? How Do Societies Decide? (HA) In the process of answering the three economic questions, every society develops an economic system. An economic system [economic system: a society s way of

More information

Economic Resources and Systems

Economic Resources and Systems Chapter 2 Economic Resources and Systems Section 2.2 Economic Systems Click here to advance to the next slide. Read to Learn Describe the three basic economic questions each country must answer to make

More information

Business Ethics Concepts & Cases

Business Ethics Concepts & Cases Business Ethics Concepts & Cases Manuel G. Velasquez Chapter Three The Business System: Government, Markets, and International Trade Economic Systems Tradition-Based Societies: rely on traditional communal

More information

Chapter 2 Economic Systems BIG IDEAS = Responsibility, Choices, Changes, and Relationships Essential Questions:

Chapter 2 Economic Systems BIG IDEAS = Responsibility, Choices, Changes, and Relationships Essential Questions: Chapter 2 Economic Systems BIG IDEAS = Responsibility, Choices, Changes, and Relationships Essential Questions: How do societies provide for their people in a traditional, command and market economy? How

More information

THE MARKET ECONOMY OF THE U.S. CONSTITUTION

THE MARKET ECONOMY OF THE U.S. CONSTITUTION ACTIVITY 1.1 Directions: Read Part A and Part B. Part C. Use information from Part A and B to complete the grid in Part A. Characteristics of a Market Economy 1. Private Property Labor resources, natural

More information

GEORGIA PERFORMANCE STANDARDS Microeconomics

GEORGIA PERFORMANCE STANDARDS Microeconomics GEORGIA PERFORMANCE STANDARDS Microeconomics GEORGIA PERFORMANCE STANDARDS INTERNATIONAL ECONOMICS Microeconomic Concepts SSEMI1 The student will describe how households, businesses, and governments are

More information

WorldView Software. Economics. West Virginia Correlation Document

WorldView Software. Economics. West Virginia Correlation Document WorldView Software Economics West Virginia Correlation Document 76 North Broadway, Suite 2002, Hicksville, NY 11801 516-681-1773 history@worldviewsoftware.com West Virginia Economics Standards Economics

More information

4. Which of the following are available in limited quantity and contribute to the problem of scarcity?

4. Which of the following are available in limited quantity and contribute to the problem of scarcity? 1. Given that resources are scarce: A) A "free lunch" is possible but only for a limited number of people B) Poor countries must make choices but rich countries do not have to make choices C) Opportunity

More information

Compare the Difference between Market and Command Economic Systems. An Exploration of Capitalism, Socialism and Communism:

Compare the Difference between Market and Command Economic Systems. An Exploration of Capitalism, Socialism and Communism: Compare the Difference between Market and Command Economic Systems An Exploration of Capitalism, Socialism and Communism: Economic Systems Economic systems answer the questions: What to produce? How to

More information

Economics. Worksheet 11.1. Circular Flow Simulation

Economics. Worksheet 11.1. Circular Flow Simulation Worksheet 11.1 Circular Flow Simulation Please note this is a class activity. Why not suggest it to your teacher? Objective: To understand how productive resources, goods and services and money flow from

More information

Challenging Marxism By Sam Wagener

Challenging Marxism By Sam Wagener Challenging Marxism By Sam Wagener The German philosopher Karl Marx provided the world with a new and challenging way to think about social and economic systems. This new social system was called Communism

More information

Chapter 1: An Economic Way of Thinking

Chapter 1: An Economic Way of Thinking Chapter 1: An Economic Way of Thinking Objectives p. 002 EPF.1 The student will demonstrate knowledge of basic economic concepts and structures by describing how consumers, businesses, and government decision

More information

Economics Test. Name: Class: Date:

Economics Test. Name: Class: Date: Class: Date: Economics Test Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. Answer 80 Multiple Choice questions and two Short Answer questions

More information

Intro to Business Chapter 2: Economic Systems UNIT TEST. Name: Period: Date:

Intro to Business Chapter 2: Economic Systems UNIT TEST. Name: Period: Date: Vocabulary Identification Word Bank 1. BUSINESS 2. MARKET ECONOMY 3. Scarcity 4. ECONOMIC SYSTEM 5. VOLUNTARY EXCHANGE 7. DIRECTED OR 8. CUSTOM-BASED PLANNED ECONOMY ECONOMY 6. COMPETITION 9. CAPITALISM

More information

Karl Marx Marx believed that the most basic determinant of one s behavior was economic the need to sustain a living.

Karl Marx Marx believed that the most basic determinant of one s behavior was economic the need to sustain a living. Karl Marx 1818 1883 Marx believed that the most basic determinant of one s behavior was economic the need to sustain a living. What are some other basic determinants of one s behavior? Is there one basic

More information

DEFINITION OF A FREE (LABOR) MARKET

DEFINITION OF A FREE (LABOR) MARKET DEFINITION OF A FREE (LABOR) MARKET A market in which buyers and sellers are at liberty to trade without restriction as to prices or quantities, and in which there is no compulsion to either buy or sell.

More information

KCCIS Y12 - IB HISTORY. Marxism BY: MELANIE AND ADRIAN

KCCIS Y12 - IB HISTORY. Marxism BY: MELANIE AND ADRIAN KCCIS Y12 - IB HISTORY Marxism BY: MELANIE AND ADRIAN 1 Contents: - Karl Marx and Fredrich Engels - What is Marxism? - How does Capitalism work? - Socialism: Solution to Capitalism Marxist theory of stages

More information

Common Sense Economics Part II. Seven Major Sources of Economic Progress Practice Test Multiple Choice Questions

Common Sense Economics Part II. Seven Major Sources of Economic Progress Practice Test Multiple Choice Questions Common Sense Economics Part II. Seven Major Sources of Economic Progress Practice Test Multiple Choice Questions 1. Why is private ownership an important source of economic prosperity? a. It eliminates

More information

Policy. The theories we develop to address the previous questions have important policy implications

Policy. The theories we develop to address the previous questions have important policy implications Policy The theories we develop to address the previous questions have important policy implications 1 The Organization of Economic Activity 1. One Slide I Meant to Cover on Tuesday 2. The Production Possibilities

More information

Student Name: Date: Teacher Name: Heather Creamer. Score:

Student Name: Date: Teacher Name: Heather Creamer. Score: Economics EOC Quiz Answer Key Microeconomic Concepts - (SSEMI1) Flow Of Goods, (SSEMI2) Law Of Demand, (SSEMI3) Economic Behavior, (SSEMI4) Organization And Role Of Business Student Name: Teacher Name:

More information

Scarcity, Choice and Economic Systems Ing. Mansoor Maitah Ph.D. et Ph.D.

Scarcity, Choice and Economic Systems Ing. Mansoor Maitah Ph.D. et Ph.D. Scarcity, Choice and Economic Systems Ing. Mansoor Maitah Ph.D. et Ph.D. The Core Issues Three core issues must be resolved What to produce? How to produce? For whome o produce? We also have to decide

More information

What is the Basic Economic Problem?

What is the Basic Economic Problem? What is the Basic Economic Problem? Economic Systems and Resources Chapter 2 Economics study of society; analyzes production, distribution, consumption of goods/services Natural Resources Human Resources

More information

Demand & Supply. Chapter 7 discusses the laws of supply and demand and the ways in which a voluntary market supports them.

Demand & Supply. Chapter 7 discusses the laws of supply and demand and the ways in which a voluntary market supports them. Demand & Supply Chapter 7 discusses the laws of supply and demand and the ways in which a voluntary market supports them. E.2.1 Define supply and demand and explain the causes of the Law of Supply and

More information

Academic Standards for Economics

Academic Standards for Economics Academic Standards for June 1, 2009 FINAL Secondary Standards Pennsylvania Department of Education These standards are offered as a voluntary resource for Pennsylvania s schools and await action by the

More information

THE ECONOMIC & BUSINESS ENVIRONMENT SETTING THE SCENE. Scarcity + + Making Decisions 29/02/2016. 1 of 38. Session 1

THE ECONOMIC & BUSINESS ENVIRONMENT SETTING THE SCENE. Scarcity + + Making Decisions 29/02/2016. 1 of 38. Session 1 Session 1 THE ECONOMIC & BUSINESS ENVIRONMENT SETTING THE SCENE 1 of 38 Scarcity + Scarcity = limited nature of society s resources Businesses allocate scarce resources among competing uses, taking into

More information

C. Resources - are factors of production that are used in the production of goods and services. Types of resources are:

C. Resources - are factors of production that are used in the production of goods and services. Types of resources are: I. CE.11a A. People make choices about how to use limited resources, decide the ownership of resources, and structure markets for the distribution of goods and services. B. Scarcity there is never enough

More information

Property rights The right to use, control, gain, and obtain benefits from a good or service.

Property rights The right to use, control, gain, and obtain benefits from a good or service. Ch.2 lecture notes Opportunity cost Opportunity cost is the highest valued alternative that must be given up. Opportunity costs may be monetary or non-monetary, but there can only be one highest valued

More information

Econ 201, Microeconomics Principles, Final Exam Version 1

Econ 201, Microeconomics Principles, Final Exam Version 1 Econ 201, Microeconomics Principles, Final Exam Version 1 Instructions: Please complete your answer sheet by filling in your name, student ID number, and identifying the version of your test (1 or 2).

More information

Chapter 6 Prices. 1. Combining Supply and Demand 2. Changes in the Market Equilibrium 3. The Role of Prices

Chapter 6 Prices. 1. Combining Supply and Demand 2. Changes in the Market Equilibrium 3. The Role of Prices Chapter 6 rices 1. Combining Supply and Demand 2. Changes in the Market quilibrium 3. The Role of rices What is the right price customers will pay? Answer... What ever Bob Barker tells them! Drew Carry!

More information

Civics & Economics. Goal 7. Contrary to popular belief, money does not grow on trees! Boosttwitter.com

Civics & Economics. Goal 7. Contrary to popular belief, money does not grow on trees! Boosttwitter.com Civics & Economics Goal 7 Economic Choices Contrary to popular belief, money does not grow on trees! Boosttwitter.com Goal 7: The learner will investigate how and why individuals and groups make economic

More information

Part III: Background to the Modern Period

Part III: Background to the Modern Period 1 Part III: Background to the Modern Period 1900-1945 Objectives for Chapter 11: 1900 to 1929 At the end of Chapter 11, you will be able to answer the following: 1. Briefly describe the main economic trends

More information

Demand and Supply. Chapter Distinguish between quantity demanded and demand and explain what determines demand.

Demand and Supply. Chapter Distinguish between quantity demanded and demand and explain what determines demand. 1 CHAPTER CHECKLIST Demand and Supply Chapter 4 1. Distinguish between quantity demanded and demand and explain what determines demand. 2. Distinguish between quantity supplied and supply and explain what

More information

AT1. Agriculture Management, Economics, & Sales Agriculture Today

AT1. Agriculture Management, Economics, & Sales Agriculture Today AT1 Agriculture Management, Economics, & Sales Agriculture Today Unit: Agribusiness in Today s Agriculture Industry Lesson Title: Agriculture Today Standards CS.02.03.01.a. Explore various career interests/options.

More information

Define and calculate the economic growth rate, and explain the implications of sustained growth.

Define and calculate the economic growth rate, and explain the implications of sustained growth. Economic Growth Chapter CHAPTER CHECKLIST Chapter 9 discusses the factors that determine economic growth, studies different theories that explain economic growth, and examines possible government polices

More information

Economic Efficiency. Chapter 6 CHAPTER SUMMARY

Economic Efficiency. Chapter 6 CHAPTER SUMMARY Chapter 6 Economic Efficiency CHAPTER SUMMARY The central idea in this chapter is Adam Smith s invisible hand. Free-market competition will ensure that the allocation of resources is economically efficient.

More information

Types of Business & Business Ownership

Types of Business & Business Ownership CHAPTER Types of Business & Business Ownership Section 3.1 Types of Business Section 3.2 Types of Business Ownership SECTION Types of Business OBJECTIVES Identify the four main types of business Examine

More information

DRAFT SOCIAL STUDIES Georgia Standards of Excellence (GSE) Economics

DRAFT SOCIAL STUDIES Georgia Standards of Excellence (GSE) Economics DRAFT SOCIAL STUDIES Economics Economics Economics is the study of how individuals, businesses, and governments make decisions about the allocation of scarce resources. The economics course provides students

More information

MAXIMIZING BEHAVIOR SUPPLY AND DEMAND THE CIRCULAR FLOW THE TWO MARKETS THE TWO MARKETS

MAXIMIZING BEHAVIOR SUPPLY AND DEMAND THE CIRCULAR FLOW THE TWO MARKETS THE TWO MARKETS Chapter 3 SUPPLY AND DEMAND MAXIMIZING BEHAVIOR Consumers maximize their utility (satisfaction) given limited resources. Businesses try to maximize profits by using resources efficiently in producing goods.

More information

Lesson 10 - The Circular Flow of Economic Activity

Lesson 10 - The Circular Flow of Economic Activity Lesson 0 - The Circular Flow of Economic Activity INTRODUCTION Economics The circular flow of economic activity is a simplified macroeconomic model of the basic economic relationships in a market economy.

More information

1. Scarcity and the Factors of Production How does scarcity force people to make economic choices?

1. Scarcity and the Factors of Production How does scarcity force people to make economic choices? 1 Chapter 1: What is Economics? 1. Scarcity and Factors of Production 2. Opportunity Cost 3. Production Possibilities Curves 1. Scarcity and the Factors of Production How does scarcity force people to

More information

WorldView Software. Economics. South Carolina Correlation Document

WorldView Software. Economics. South Carolina Correlation Document WorldView Software Economics South Carolina Correlation Document 76 North Broadway, Suite 2002, Hicksville, NY 11801 516-681-1773 history@worldviewsoftware.com South Carolina Social Studies Economics WorldView

More information

What Economic Systems were developed to answer the 3 Key Economic Questions?

What Economic Systems were developed to answer the 3 Key Economic Questions? What Economic Systems were developed to answer the 3 Key Economic Questions? Do Now: In which country would consumers have a greater variety of goods available to them one that has a pure market economy

More information

Unit 7: Factor Markets

Unit 7: Factor Markets Unit 7: Factor Markets Factor Market Markets in which the factors of production are bought and sold. A factor input is either land, labor, capital, or entrepreneurship Entrepreneurship is not purchased

More information

Topic 4: Different approaches to GDP

Topic 4: Different approaches to GDP Topic 4: Different approaches to GDP PRINCIPLES OF MACROECONOMICS Dr. Fidel Gonzalez Department of Economics and Intl. Business Sam Houston State University Three different approaches to measure the GDP

More information

Exam 1 Review. 3. A severe recession is called a(n): A) depression. B) deflation. C) exogenous event. D) market-clearing assumption.

Exam 1 Review. 3. A severe recession is called a(n): A) depression. B) deflation. C) exogenous event. D) market-clearing assumption. Exam 1 Review 1. Macroeconomics does not try to answer the question of: A) why do some countries experience rapid growth. B) what is the rate of return on education. C) why do some countries have high

More information

Comparing Economic Systems

Comparing Economic Systems Comparing Economic Systems Overview In this lesson, students will discuss how different societies answer the same fundamental economic questions by comparing various economic systems. Grade 10 NC Essential

More information

Derivative strategies using

Derivative strategies using FP CLASSROOM Derivative strategies using options Derivatives are becoming increasingly important in the world of finance. A Financial Planner can use the strategies to increase profitability, hedge portfolio

More information

AP Microeconomics Chapter 3 Outline

AP Microeconomics Chapter 3 Outline I. Learning Objectives In this chapter students should learn: A. What demand is and how it can change. B. What supply is and how it can change. C. How supply and demand interact to determine market equilibrium.

More information

Economics EOC Quiz Answer Key Fundamental Economic Concepts - (SSEF4) Economic Systems, (SSEF5) Roles Of Government, (SSEF6) Productivity

Economics EOC Quiz Answer Key Fundamental Economic Concepts - (SSEF4) Economic Systems, (SSEF5) Roles Of Government, (SSEF6) Productivity Economics EOC Quiz Answer Key Fundamental Economic Concepts - (SSEF4) Economic Systems, (SSEF5) Roles Of Government, (SSEF6) Productivity Student Name: Teacher Name: Heather Creamer 1) In a command economy,

More information

Chapter 12 The South Section Notes Video Maps History Close-up Images Quick Facts

Chapter 12 The South Section Notes Video Maps History Close-up Images Quick Facts Chapter 12 The South Section Notes Growth of the Cotton Industry Free Southern Society The Slave System History Close-up Southern Plantation Quick Facts Chapter 12 Visual Summary Video Regional Economies

More information

AP Microeconomics Chapter 12 Outline

AP Microeconomics Chapter 12 Outline I. Learning Objectives In this chapter students will learn: A. The significance of resource pricing. B. How the marginal revenue productivity of a resource relates to a firm s demand for that resource.

More information

FBLA: ECONOMICS. Competency: Basic Economic Concepts and Principles

FBLA: ECONOMICS. Competency: Basic Economic Concepts and Principles Competency: Basic Economic Concepts and Principles 1. Define money (characteristics, role, and forms) and trace how money and resources flow through the American economic system. 2. Utilize decision-making

More information

Comparative Advantage, and the Market System

Comparative Advantage, and the Market System CHAPTER 2 Trade-offs, Comparative Advantage, and the Market System Chapter Summary and Learning Objectives 2.1 Production Possibilities Frontiers and Opportunity Costs (pages 40 46) Use a production possibilities

More information

Wells Fargo Hands on Banking & CEE National Content Standards Alignment

Wells Fargo Hands on Banking & CEE National Content Standards Alignment Standard 1: Scarcity Productive resources are limited. Therefore, people can not have all the goods and services they want; as a result, they must choose some things and give up others. Section 1 Savings

More information

September 5, 2012 Chapter 1 practice questions

September 5, 2012 Chapter 1 practice questions September 5, 2012 Chapter 1 practice questions 1. Economics is primarily concerned with the allocation of scarce resources which have alternative uses. Use a production possibility curve to explain this

More information

Presentation Plus! Economics: Principles and Practices Copyright by The McGraw-Hill Companies, Inc.

Presentation Plus! Economics: Principles and Practices Copyright by The McGraw-Hill Companies, Inc. Presentation Plus! Economics: Principles and Practices Copyright by The McGraw-Hill Companies, Inc. Developed by FSCreations, Inc., Cincinnati, Ohio 45202 Send all inquiries to: GLENCOE DIVISION Glencoe/McGraw-Hill

More information

Level 1 Business Studies, 2011

Level 1 Business Studies, 2011 90837 908370 1SUPERVISOR S Level 1 Business Studies, 2011 90837 Demonstrate an understanding of internal features of a small business 9.30 am Tuesday 29 November 2011 Credits: Four Achievement Achievement

More information

Potential GDP and Economic Growth

Potential GDP and Economic Growth Potential GDP and Economic Growth CHAPTER17 C H A P T E R C H E C K L I S T When you have completed your study of this chapter, you will be able to 1 Explain the forces that determine potential GDP and

More information

Section 27.1 Sole Proprietorship

Section 27.1 Sole Proprietorship Chapter Sole Sole 27 Proprietorship Proprietorship and Partnership Section 27.1 Section 27.2 The Partnership and Partnership Why It s Important Understanding the nature of a sole proprietorship will help

More information

The Beginnings of Industry

The Beginnings of Industry The Beginnings of Industry What might be the advantages and disadvantages of What might Where the What women might this are do life-style? the do you women rest with see of the here? working? the doing?

More information

Chapter 1: Economics Foundations and Models...3. Chapter 2: Choices and Trade-Offs in the Market...7

Chapter 1: Economics Foundations and Models...3. Chapter 2: Choices and Trade-Offs in the Market...7 Chapter 1: Economics Foundations and Models...3 Chapter 2: Choices and Trade-Offs in the Market...7 Chapter 3: Where prices come from The interaction of Demand and Supply...10 Chapter 4: Elasticity The

More information

7. Which of the following is a flow variable? A) wealth B) the number unemployed C) government debt D) income

7. Which of the following is a flow variable? A) wealth B) the number unemployed C) government debt D) income Name: Date: 1. GDP is all of the following except the total: A) expenditure of everyone in the economy. B) income of everyone in the economy. C) expenditure on the economy's output of goods and services.

More information

At the end of Chapter 10, you will be able to answer the following:

At the end of Chapter 10, you will be able to answer the following: 1 Objectives for Chapter 10 The Circular Flow Model At the end of Chapter 10, you will be able to answer the following: 1. Explain the basic circular flow model. 2. Define "consumption" and "saving" 3.

More information

ec2ex1.rvw Practice Questions Exam 1 Spring 2007

ec2ex1.rvw Practice Questions Exam 1 Spring 2007 ec2ex1.rvw Practice Questions Economics 120 M. Babcock Exam 1 Spring 2007 1. The law of increasing costs states that: a) if the prices of all the resources devoted to the production of goods increase,

More information

Finance Module 1 Lessons

Finance Module 1 Lessons Finance Module 1 Lessons 01.01: Families and the Economy What is your role in the economy? Do your actions have an influence on the economy? Most of us probably don't consider this on a regular basis.

More information

Lesson 4 - Property Rights in a Market Economy

Lesson 4 - Property Rights in a Market Economy Lesson 4 - Property Rights in a Market Economy INTRODUCTION Economics All market economies have several basic characteristics in common including private property, free enterprise, self-interest, competition,

More information

Pre- and Post Test High School / Grades 9-12

Pre- and Post Test High School / Grades 9-12 Pre- and Post Test High School / Grades 9-12 1. Investments that have high risk may provide higher returns over time than investments with less risk. 2. Based on the Rule of 72, if you invested money and

More information

WHAT ARE OPTIONS OPTIONS TRADING

WHAT ARE OPTIONS OPTIONS TRADING OPTIONS TRADING WHAT ARE OPTIONS Options are openly traded contracts that give the buyer a right to a futures position at a specific price within a specified time period Designed as more of a protective

More information

Two Views of the Social Contract

Two Views of the Social Contract NAME: Global History III Enlightenment Two Views of the Social Contract In the 1600s, two English thinkers, Thomas Hobbes and John Locke, set forth ideas that were to become key to the Enlightenment. Both

More information

Economics 101 section 5 - Practice exam #1

Economics 101 section 5 - Practice exam #1 Economics 101 section 5 - Practice exam #1 Multiple Choice Identify the letter of the choice that best completes the statement or answers the question. 1. Economics is the study of a. how to make money

More information

Economics 100 Quiz 1 Fall The fundamental economic problem faced by all societies is: a. unemployment c. poverty b. inequality d.

Economics 100 Quiz 1 Fall The fundamental economic problem faced by all societies is: a. unemployment c. poverty b. inequality d. Economics 100 Quiz 1 Fall 2000 1. The fundamental economic problem faced by all societies is: a. unemployment c. poverty b. inequality d. scarcity 2. "Capitalism" refers to: a. the use of markets c. private

More information

Review Questions. Problems and Applications

Review Questions. Problems and Applications 1. No. This chapter discusses the benefits to a country of specializing in the production of those products for which it has a comparative advantage and trading for the other goods. Those benefits are

More information

Economics analyzing the roles of money and banking in an economic system explaining the basic features of market structures and exchanges

Economics analyzing the roles of money and banking in an economic system explaining the basic features of market structures and exchanges TITLE: Saving, Investing, and the Invisible Hand PRIMARY SUBJECT AREAS: High School Economics GRADE LEVELS: 9-12 OVERVIEW: This lesson explains how financial institutions in a market economy channel savings

More information

This lesson was made possible with the assistance of the following organisations:

This lesson was made possible with the assistance of the following organisations: 7 MODULE 2: Fundamentals of Economics in Economics LESSON 2: Basic Principles of Economics TIME: 1 hour 36 minutes AUTHOR: Prof. Francis Wambalaba This lesson was made possible with the assistance of the

More information

- Durkheim approach called "functionalism". He focuses on the division of labour. - Durkheim identified two major types of Social Solidarity;

- Durkheim approach called functionalism. He focuses on the division of labour. - Durkheim identified two major types of Social Solidarity; Chapter 6 Classic theories of bureaucracy. Durkheim and the division of labor: - Durkheim approach called "functionalism". He focuses on the division of labour. - For him the important point about the

More information

Augusta Canal National Heritage Area Grades 9-12 Social Studies/Economics/History/Language Arts Lesson Plans. Stage 1 Desired Results

Augusta Canal National Heritage Area Grades 9-12 Social Studies/Economics/History/Language Arts Lesson Plans. Stage 1 Desired Results Title: Banking on the Canal Instructional Time: 12 hrs. Big Ideas: Scarcity, Productive Resources, Opportunity Costs, Production Possibility Frontier, Economic Systems, Types of Businesses, Normative Versus

More information

Quiz 1 (Chapters 1 and 2) Answers

Quiz 1 (Chapters 1 and 2) Answers Econ*1050 Introductory Microeconomics Instructor: Vitali Alexeev Quiz 1 (Chapters 1 and 2) Answers 1) Both households and societies face many decisions because a. resources are scarce. b. populations may

More information

JOIN THE REVOLUTION. our plan for sellers. ReValu8 Limited ABN: 94 166 624 915

JOIN THE REVOLUTION. our plan for sellers. ReValu8 Limited ABN: 94 166 624 915 JOIN THE REVOLUTION our plan for sellers AN AVERAGE OF 500,000 PROPERTIES ARE BOUGHT & SOLD EVERY YEAR THROUGH 70,000+ REAL ESTATE AGENTS CHASING $10 BILLION THAT S SPENT ON ADVERTISING AND AGENT COMMISSIONS

More information

Before You Invest Post Test (HS)

Before You Invest Post Test (HS) Before You Invest Post Test (HS) 1. Common stock ownership gives investors a. voting rights in shareholders meetings b. guaranteed dividends c. low risk with a high rate of return. 2. The statement risk

More information

1. Exercise or Strike Price price at which assets can be purchased (call) or sold (put).

1. Exercise or Strike Price price at which assets can be purchased (call) or sold (put). CHAPTER 15. OPTIONS MARKETS Options are traded in: Common stocks Foreign exchanges Agricultural commodities Precious metals Interest Rates The Options Contract Two basic types of Options: Calls and Puts

More information

Economics - Chapter 3 Notes

Economics - Chapter 3 Notes Economics - Chapter 3 Notes Section 1: Forms of Business Organizations There are three main forms of business organizations in the economy today the sole proprietorship, the partnership, and the corporation.

More information

Perfect competition is a market structure in which a large number of firms all produce the same product.

Perfect competition is a market structure in which a large number of firms all produce the same product. The Four Conditions for Perfect Competition Perfect competition is a market structure in which a large number of firms all produce the same product. 1. Many Buyers and Sellers There are many participants

More information

ECON 202: Principles of Microeconomics. Chapter 1 Economics: Foundations and Models

ECON 202: Principles of Microeconomics. Chapter 1 Economics: Foundations and Models ECON 202: Principles of Microeconomics Chapter 1 Economics: Foundations and Models Economics: Foundations and Models 1. Introduction. 2. Three key economic ideas. 3. The economic problem that every society

More information

Demand Equilibrium price Consumer sovereignty Elasticity Shortage Surplus

Demand Equilibrium price Consumer sovereignty Elasticity Shortage Surplus Social Studies AP Economics STANDARD SKILLS and CONCEPTS VOCABULARY Standard 1: Scarcity and Economic Reasoning Students will understand that productive resources are limited; therefore, people, institutions

More information

WHAT IS A PRIVATE LIMITED COMPANY?

WHAT IS A PRIVATE LIMITED COMPANY? WHAT IS A PRIVATE LIMITED COMPANY? CONTENTS What is a limited company? ACTIVITY 1.9.1 Types of organisation What is a private limited company? Advantages of being a private limited company Disadvantages

More information

The Economic Problem

The Economic Problem 2 The Economic Problem Learning objectives: The production possibilities frontier (PPF) and use it to calculate opportunity cost PPF, Preference and Efficiency Explain how current production choices expand

More information

7-11 sample test questions

7-11 sample test questions Name: Class: _ Date: _ ID: A 7-11 sample test questions Multiple Choice Identify the choice that best completes the statement or answers the question. 1. Why does a perfectly competitive market require

More information

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question.

MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. Survey of Microeconomics, Quiz #3 Fall 2006 Name MULTIPLE CHOICE. Choose the one alternative that best completes the statement or answers the question. 1) In the absence of a rent ceiling, the long run

More information

Content Descriptions Economics/Business/Free Enterprise

Content Descriptions Economics/Business/Free Enterprise Content Descriptions Economics/Business/Free Enterprise The State Board of Education is required by Georgia law (A+ Educational Reform Act of 2000, O.C.G.A. 20-2-281) to adopt End-of-Course Tests (EOCT)

More information

Total Test Questions: 80 Levels: Grades Units of Credit:.50

Total Test Questions: 80 Levels: Grades Units of Credit:.50 DESCRIPTION This course focuses on the study of economic problems and the methods by which societies solve them. Characteristics of the market economy of the United States and its function in the world

More information

Reading 28 Risk Management Applications of Option Strategies

Reading 28 Risk Management Applications of Option Strategies Reading 28 Risk Management Applications of Option Strategies A Compare the use of covered calls and protective puts to manage risk exposure to individual securities. Covered calls 1. Covered Call = Long

More information