Date: May 18, 2011 Topic: Review Day 1 Aim: How can we address our weaknesses and address them through review? Do Now: Multiple Choice Questions

Remember This review is NOT ALL INCLUSIVE. Not necessarily in order. You should be completely tuned in to this review.

Opportunity Cost  the most desirable alternative given up for the decision. Factory is an example of physical capital. Efficient economy  one that uses its resources to make the greatest possible number of goods. Resources made by humans used to create other goods and services is capital. Resources used to make all goods and services are factors of production. Production Possibilities graph is to show alternative ways a country can use its resources. Efficient economy uses its resources to make the most goods and services. Guns and butter (issues) All resources are scarce.

You bought two new CD’s with the last $30 in your wallet –your next payday is Monday  your opportunity cost might be dinner and a movie on Saturday. Just because you have a low income doesn’t mean that the government will provide for you. Making profits motivates a manufacturer to sell a product. Ford installs new robotic machinery to build cars  they are using technology to incite growth. Entrepreneur  in business for themselves Ex: paints murals in office buildings or schools. Scarcity  someone can’t have an endless supply of everything. Human capital  a workers knowledge. Underutilizing resources

Laissez-Faire  disapprove of government interference. Traditional Economy  dad farmer means that you’re a farmer. Technology  makes an economy stronger and more efficient. Law of demand  goods price is lower – people will buy more of it. Inelastic Demand  increase in price will not impact buying habits. Baby Boomers  as they grow older demand shifts through their ages. Market demand schedule  shows the products demanded at each price in a market. If the price is expected to rise in the future current demand will rise.

A shift in a demand curve means a change in demand at every price. Moving from a desert community to a rainy city will change ones demand for umbrellas. Know how to read a demand curve.

Date: May 19, 2011 Topic: Review Day 3 Aim: How can we address our weaknesses and address them through review? Do Now: Multiple Choice Questions

Monopolistic Competition  many companies selling similar but not identical products. Discounts are not forms of non-price competition. When a government deregulates a product or service some government regulations are eliminated. Perfect competition you do not have a wide variety of products. Seasonal unemployment occurs because of schedules – structural occurs because people lack skills. When an economy is working properly unemployment is usually between 4-6 percent.

Shift in Demand or Change in Demand

Equilibrium in a market occurs when the price balances the plans of buyers and sellers. It sets the value of the product. Equilibrium price is represented by the point where the demand and supply curves intersect.

A new invention lowering the cost of production can move a production possibilities graph to the right. What happens to a market in equilibrium if there is an excess in supply?  the price will drop. When consumers do not have the power to make good choices the market is inefficient. A natural monopoly is when a single firm controls all of the output. Oligopoly is when 2-4 firms produce 70%-80% of the output. An example of a fixed price is the rent.