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Economics EOC review

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  • What is the definition of Scarcity?
    Having unlimited wants but limited resources.
  • What are the three economic questions?
    What should be produced? How should it be produced? For who are we producing for?
  • Describe a Mixed economy as well as the economic ideology that is associated with it.
    Individuals have freedom but there are government regulations; Socialism.
  • What does a Production Possibilities Curve show?
    How much a producer can possibly produce of two goods with the resources they have available to them.
  • A country with an absolute advantage has the advantage of producing how many types of products?
    One type of product
  • What is perfect competition?
    When sellers all sell the same product, are well-informed, and therefore have no control over the price.
  • Name two different factors that can cause a shift in the Demand Curve.
    Income, Future Expectations, Population, Preferences/Tastes, Complementary/Substitute Goods
  • In the Circular Flow Model, which market flows from Households to Businesses?
    The Resource Market
  • What is the definition of a Budget?
    A limit on the amount of money you can spend within a time period.
  • What is inflation?
    A rise in prices and reduction in purchasing power.
  • What is the definition of Exchange Rate?
    The value of one country's currency in comparison to another.
  • What are the four types of unemployment?
    Frictional, Structural, Cyclical, and Seasonal.
  • What is the ONLY THING that can cause a change in the Quantity Demanded/Supplied?
    A price change
  • What is Gross Domestic Product per capita supposed to portray?
    The average wealth of an individual within a country.
  • What type of government policy is used to promote economic stability by monitoring how much money is in circulation?
    Monetary Policy
  • What may the government do in an attempt to expand the economy using Monetary Policy?
    Buy back government bonds, decrease interest rates so people borrow more money, and decrease the amount of money in the reserves.
  • What does it mean if the U.S. dollar appreciates?
    The value goes up.
  • What is the consumer price index?
    A measure of a "basket of goods" (common consumer products) used to monitor inflation.
  • What may the government do in an attempt to contract the economy using Fiscal Policy?
    Tax people more, spend less government money.
  • What is the definition of a trade off?
    To gain something, you must give up something else.
  • Describe a Command economy as well as the economic ideology that is associated with it.
    Government controls everything; Communism.
  • What are the four various parts of the Business Cycle use to describe the economy?
    Peak, Trough, Expansion, and Contraction
  • Name two different factors that can cause a shift in the Supply Curve.
    Input Costs, Technology, Subsidies/Taxes, Future Expectations, Number of Suppliers
  • What is a quota?
    A limit of imports
  • What does NAFTA/USMCA promote between the United States, Mexico, and Canada?
    Free trade without tariffs.
  • A country with a comparative advantage has the advantage of producing how many types of products?
    More than one type of product
  • What may the government do in an attempt to contract the economy using Monetary Policy?
    Sell government bonds, increase interest rates so people borrow less money, and increase the amount of money in the reserves.
  • In the Circular Flow Model, which market flows from Businesses to Households?
    The Product Market
  • A price floor can create a...
    Surplus of goods
  • Describe a Market economy as well as the economic ideology that is associated with it.
    Individuals own the factors of production, no government regulation; Capitalism.
  • What is an example of Opportunity Cost?
    When paying for a broken window, the opportunity cost is anything else you could have purchased with the money spent on the window.
  • What is Gross Domestic Product?
    The total sale of all final goods and services sold and produced within a country within a year.
  • What may the government do in an attempt to expand the economy using Fiscal Policy?
    Tax people less, spend more government money.
  • A price ceiling can create a...
    Shortage of goods
  • What type of policy is used by the government to promote economic stability through taxation and government spending on public works?
    Fiscal Policy
  • What are two examples of price control?
    Price Floors and Price Ceilings
  • What are the four factors of production?
    Land, Labor, Capital, and Entrepreneurship
  • What is monopolistic competition?
    When sellers sell differentiated products, and have some control over prices.
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