Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
Unit 1 AP Eco Test Review • How are inflation and unemployment related? Is this a long-term or short-term relationship? What graphical representation do we use to show this relationship? • If you aggressively fight inflation, you will increase unemployment. This is a shortterm relationship that is illustrated using a Phillip’s Curve. • How do you determine a country's standard of living? • Standard of living is determined by the country’s productivity. • How do you determine the economic costs of something? • The cost of something is the value of the item you give up to get that item. • How does a typical economist feel about the idea of rent controls (putting a maximum price that can be charged for rent)? • If you put a ceiling on rent, you will hurt the quantity and quality of available housing. • If a good is elastic, what will happen to revenue if the price is increased? Why? • Revenue will drop because people don’t need the item, and price is a major determining factor in whether or not to purchase the good. • If a good is inelastic, what will happen to revenue if the price is increased? Why? • Revenue will increase because people need the item, and price is not a major determining factor in whether or not to purchase the good. • If done correctly, trade can make everybody better off. Why? • Trade allows people or nations to specialize in the things they do best, and therefore, they are being more efficient. • If scientists find evidence that proves that eating cauliflower reduces wrinkles, what do you think would happen in the market for cauliflower? • There would be an increase in the demand for cauliflower to fight wrinkling. • If the price of lumber increases, what would happen in the market for houses and furniture made from wood? • The supply would decrease due to the increased cost of production. Prices for houses and furniture would increase, and the quantity would decrease. • If there is a decrease in demand coupled with an increase in supply, what happens to price and quantity? • Price would decrease and the change in quantity would be undetermined. • If there is an increase in demand coupled with a decrease in supply, what happens to price and quantity? • Price would increase and the change in quantity would be undetermined. • In America, we have seen a rise in the living standards of American workers throughout our history. What is the primary cause of this? • American workers have become more productive through the use of advancements in technology and the discovery of new pools of resources. • In Economics, scarcity is defined as what? • Scarcity is unlimited wants coupled with limited resources to fill those wants. • In the circular-flow diagram, what are the two markets and the two entities represented? • The markets are the markets for goods & services and the market for the factors of production. • The entities are households and firms. • What do we look at to determine if we should or should not trade with someone? • You determine trade based upon comparative advantage. • What do we mean by the phrase, "There is no such thing as a free lunch,"? • Everything has a cost. Nothing is truly ever free because you have to give up something to get another thing. • What do we mean by the term factors of production? • The land, labor, capital and entrepreneurship used to produce the items we want to consume in our economy. • What has to happen to cause a shortage in a market? How is it fixed? • The item is priced below what should be the equilibrium price in that market. You increase the price. • What is a market failure? What is an example? • A market failure is when the market system fails to allocate resources in an efficient manner when left on its own. A monopoly is an example. • What is a price ceiling? What is a price floor? If a price ceiling is binding, what will happen in the market for that product? If a price floor is binding, what will happen in the market for that product? • A ceiling is a maximum price one is allowed to charge/pay. A floor is a minimum price one is allowed to charge/pay. If the ceiling is binding, it will cause a shortage in the market. If a floor is binding, it will cause a surplus in the market. • What is involved in thinking at the margin? • Thinking at the margin means comparing the costs and benefits of a decision. • What is the difference between equity and efficiency? • Equity is being equal in the distribution of an economy’s resources. Efficiency means getting the most out of the economy’s resources. • When demand decreases, what happens to price and quantity? • Price and quantity will both decrease. • When demand increases, what happens to price and quantity? • Price and quantity will both increase. • When supply decreases, what happens to price and quantity? • Price will increase and quantity will decrease. • When supply increases, what happens to price and quantity? • Price will decrease and quantity will increase. • Whenever the price of a good changes, how must you state the change in the amount purchased or produced? • If the price of the good is the only thing that has changed, you need to state the change as a change in quantity supplied or quantity demanded. • Know how to correctly draw and label a production possibilities curve, and know how to change it given certain circumstances. (Refer to practice problems & Ch. 2 in book). • Know how to compute absolute advantage, comparative advantage and opportunity costs for an input or output problem. (Refer to practice problems & Ch. 3 in book). • Know how to properly draw and label a supply and demand graph, and know to make changes to the graph given a certain circumstance. (Refer to practice problems & Ch. 4 in book). • http://tinyurl.com/yr3wzz