2. Key Terms and Ideas  Why would a production possibilities curve move down and to the left?

3. Key Terms and Ideas  What would cause it to move to the right?

4. Key Terms and Ideas  Centrally Planned Economies.  Competition.  Specialization makes an economy efficient.  Chinese economy is mixed but on the side of the centrally planned.

5. Key Terms and Ideas  Free Market – encourage growth.  Adam Smith.  Traditional Economy.  Competition - regulating force in the market and wide variety of goods.  Centrally planned economy – gov’t might motivate workers through posters or fliers.  Market Demand Schedule will show quantities demanded at each price of all consumers in a market.  Baby Boom and Demand.

7. Key Terms and Ideas  Elastic/Inelastic Demand – whether you react or not to a price change.  Inelastic demand – you will continue to buy the product regardless of the price change.  Elastic demand – you are reacting to it so you won’t.  Demand Schedule – lists how much a person will buy at different prices.  Law of Demand – lower the price – people will buy more of it.  Inferior Good – a increase in income will cause your demand for certain goods to fall (generics).  Goods for sale now but the price increase later – store the goods until the prices rise.

8. THEIR DEMAND FOR MILK IS WHAT? THEIR DEMAND FOR ICE CREAM IS WHAT?

10. Key Terms and Ideas  Law of Supply – produce more when the price goes up (think like a producer).  Elasticity of Supply – changing the supply of a product.  Inelastic supply – agricultural goods are difficult to change supply.  Passenger airplanes – a small increase in price will have a big impact on supply. Rugs, plums, and sandwiches have more of an inelastic supply.

12. Key Terms and Ideas  Monopolistic Competition – companies selling similar but not identical products.  Non-price competition.  Patents – a company can profit without worrying about competition.  Internet has reduced start up costs.  Natural monopolies.  Antitrust laws protect against monopolies.  Microsoft has not been forced to split up entirely. At and t has as well as standard oil.