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 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 PPL PA wine and spirits Post office DeBeers (back in the day)

Page 5 and 6 of review guide These were recent