Download Name - Midway ISD

Name _________________________________
Class period__________
Economics Unit 1 Review :Chapters 1,2 and 18
Chapter 1, Section 1 (pages 4-10) Scarcity and the Science of Economics
1. The fundamental economic problem is __________________. It affects almost every
______________ that we make.
2. Define SCARCITY :
3. Economics is the study of how people try to satisfy what appears to be seemingly
____________________ and ____________________wants through the _____________
use of relatively _____________________ resources.
4. What is the difference between a need and a want ?
5. What does the acronym TINSTAAFL stand for ?
6. What does this mean?
7. The three basic economic questions are :
___________ to produce?
___________ to produce?
_______ __________ to produce?
8. List and define the four factors of production.
a.
b.
c.
d.
9. What is the difference between capital and financial capital?
10. The four key elements to the study of economics are :
a.
b.
c.
d.
11. What does GDP stand for ?
12. Define GDP :
Chapter 1, Section 2 ( pages 12-17) Basic Economic Concepts
1. The two economic products are _______________ and __________________.
2. What is the difference between a good and a service?
3. How do consumer goods and capital goods differ?
4. What kind of good lasts for more than 3 years ?
5. Give three examples of services :
6. Value refers to a ______________ than can be expressed in _________________.
7. What is the paradox of value ?
8. Utility is the capacity to be _________________ and provide
___________________.
9. For something to have value it must be ________________ and ___________.
10. Is utility fixed ?
11. Give an example of the paradox of value.
12. What is wealth?
13. Are services counted in wealth?
Why or why not?
14. Draw and label the CIRCULAR FLOW OF ECONOMIC ACTIVITY.
15. Define AND give an example of division of labor.
16. When does specialization take place?
Profiles in Economics, ADAM SMITH (page 18)
1. Who is Adam Smith?
2. Why is he important to the study of economics?
3. What important book did he write?
4. What does the invisible hand do?
5. What does the French term laissez-faire mean?
Chapter 1, Section 3 (pages 19-25) Economic choices and decision making
1. Trade-offs are ____________ choices. Give an example.
2. What does a production possibilities frontier (PPF) represent?
3. Draw a production possibilities frontier/curve.
4. What is opportunity cost?
5. Where is the maximum combination of output on the frontier?
6. What happens if you are inside the curve on the PPF?
7. What if you are outside of the PPF?
8. Define free enterprise economy?
Chapter 18, Section 1 (pages 491-494)
1. Throughout the 20th century, the world’s developed nations fell into three
categories of economic systems :
a.
b.
c.
2. LABEL the spectrum of economic systems in the space below, with the system
using the most government control on the far left and the system using the least
government control on the far right:
X----------------------------------------X--------------------------------------X
3. Under ______________ the means of production are ______________ owned.
Prices are determined by __________and ______________, and businesses direct
resources to activities that will likely bring the most ______________.
4. List 3 advantages and 3 disadvantages of capitalism in the chart below:
Advantages of capitalism
Disadvantages of capitalism
5. ______________is a system in which government owns and runs SOME of the
basic resources. Most of these societies have governments that are
____________________ with elected officials directing the allocation of
resources.
6. In the chart below, list 2 advantages and 2 disadvantages of socialism:
Advantages of socialism
Disadvantages of socialism
7. In its purest form, ____________________is a ___________________ and an
__________________framework where ALL property is
________________________ owned, labor is organized for the advantage of the
_______________ and everyone consumes according to their ______________.
8. True or false : To date, no modern country has achieved the ideal of pure
communism.
9. Give examples of two countries that currently practice communism:
a.
b.
10. Complete the table about communism below :
Characteristics of communism
Disadvantages of communism
Chapter 2, Section 2 (pages 41-44) Evaluating economic performance
1. In the United States, people place a high value on _________________ to make
their own ___________________decisions.
2. Why must economic decisions be made efficiently?
3. Define economic equity.
4. Give two examples of economic security.
5. What does full employment mean ?
6. Define inflation .
7. Who is hurt most by inflation?
8. Economic growth is important because a nation’s _______________is growing.
9. What is the tradeoff if minimum wage is increased?
Chapter 2, Section 3 (pages 46-51) CAPITALISM AND ECONOMIC
FREEDOM
1. Give a synonym for capitalism:
2. List the five characteristics of capitalism :
a.
b.
c.
d.
e.
3. Voluntary exchange is the act of buyers and sellers _________ and
___________________ engaging in ______________ transactions. Both the
buyer and the seller are ______________________ after the exchange is made
than before.
4. What is the profit motive, and who has it?
5. Capitalism thrives on ___________________. Why?
6. Why is the role of the consumer important in our economy?
7. The role of the government is to act as ________________, ______________,
_______________________, and __________________of national goals.
8. Name three goods and services that the government supplies.
9. What type of economy does the U.S. have?