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Economics
Course Summary
Economics provides an introduction to the concepts of both macro- and microeconomics. Prentice
Hall’s Economics: Principles in Action provides the basis for instruction. Students explore topics such
as scarcity, opportunity cost, and supply and demand. The course provides an overview of the free
market and centrally planned economies, as well as how government influences economics. Students
will also explore business and labor, money, banking, and finance. Economics introduces students to
economic growth, development, and challenges in both the U.S. and the global economies.
1. Introduction to Economics
1. Scarcity, Production Factors, and Opportunity Cost
 Explain why scarcity and choice are basic problems of economics
 Identify land, labor, and capital as the three factors of production, and identify
the two types of capital
 Explain the role of entrepreneurs
 Explain why economists say all resources are scarce
 Describe why every decision involves trade-offs
 Explain the concept of opportunity cost
 Explain how people make decisions by thinking at the margin
2. Production Possibilities Curves
 Interpret a production possibilities curve
 Demonstrate how production possibilities curves show efficiency, growth, and
cost
 Understand that a country's production possibilities depend on its available
resources and technology
3. Answering the Three Economic Questions
 Identify the three key economic questions of what to produce, how to produce,
and who consumes what is produced
 Analyze the societal values that determine how a country answers the three
economic questions
 Explain the characteristics of traditional, command, and market economies and
describe the societal values that influence them
4. Free Market, Planned, and Modern Economies
 Explain why markets exist; Analyze a circular flow model of a free market
economy
 Understand the self-regulating nature of the marketplace; Identify the
advantages of a free market economy
 Describe how a centrally planned economy is organized
 Analyze the centrally planned economy of the former Soviet Union; Identify
the problems of a centrally planned economy
 Explain the rise of mixed economic systems; Interpret a circular flow model of
a mixed economy
 Compare the mixed economies of various nations along a continuum between
centrally planned and free market systems
 Understand the role of free enterprise in the economy of the United States
5. Benefits of Free Enterprise, Growth, and Stability
 Describe the tradition of free enterprise in the United States and the
constitutional protections that underlie it
 Explain the basic principles of the U.S. free enterprise system
 Identify the role of the consumer in the U.S. free enterprise system
 Describe the role of the government in the U.S. free enterprise system
 Explain how the government tracks and seeks to influence business cycles
 Analyze how the government promotes economic strength
 Analyze the effect of technology on productivity
6. Providing Public Goods and a Safety Net
 Identify examples of public goods
 Analyze market failures
 Evaluate how the government allocates some resources by managing
externalities
 Summarize the U.S. political debate on ways to fight poverty
 Describe the main programs through which the government redistributes
income
7. Unit Review
 Review the basic ideas of economics
 Learn about scarcity, the factors of production, decision making, and
opportunity costs
 Look at how societies have developed different economic systems to make
choices about resource allocations
 Examine one of those systems, the American system of free enterprise
8. Unit Assessment
There are no objectives for this lesson.
2. How Markets Work
1. Understanding Demand
 Explain the law of demand
 Understand how the substitution effect and the income effect influence
decisions
 Create a demand schedule for an individual and a market
 Interpret a demand graph using demand schedules
2. Demand Curve Shifts and Elasticity of Demand
 Understand the difference between a change in quantity demanded and a shift
in the demand curve
 Identify the determinants that create changes in demand and that can cause a
shift in the demand curve
 Explain how the change in the price of one good can affect demand for a
related good
 Explain how to calculate the elasticity of demand
 Identify factors that affect elasticity
 Explain how firms use elasticity of supply and time
3. Understanding Supply
 Explain the law of supply
 Interpret a supply graph using a supply schedule
 Explain the relationship between elasticity of supply and time
4. Costs of Production
 Explain how firms decide how much labor to hire to produce a certain level of
output
 Analyze the production costs of a firm
 Understand how a firm chooses to set output
 Explain how a firm decides to shut down an unprofitable business
5. Changes in Supply
 Identify how determinants such as input costs create changes in supply
 Identify three ways that the government can influence the supply of a good
 Understand supply and demand in the global economy
 Analyze the effects of other factors that affect supply
6. Supply and Demand and Market Equilibrium
 Explain how supply and demand create balance in the marketplace
 Compare a market in equilibrium with a market in disequilibrium
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Identify how the government sometimes intervenes in markets to control
prices
 Analyze the effects of price ceilings and price floors
 Identify the determinants that create changes in price
 Explain how a market reacts to a fall in supply by moving to a new equilibrium
 Explain how a market reacts to shifts in demand by moving to a new
equilibrium
The Role of Prices
 Analyze the role of prices in a free market
 List the advantages of a price-based system
 Explain how a price-based system leads to a wider choice of goods and more
efficient allocation of resources
 Describe the relationship between prices and the profit incentive
Perfect Competition and Monopoly
 Describe the four conditions that are in place in a perfectly competitive market
 List two common barriers that prevent firms from entering a market
 Describe prices and output in a perfectly competitive market
 Describe characteristics and give examples of monopoly
 Describe how monopolies are formed, including government monopolies
 Explain how a firm with a monopoly sets output and price and why companies
practice price discrimination
Competition, Oligopoly, and Regulation
 Describe characteristics and give examples of monopolistic competition
 Explain how firms compete without lowering prices
 Understand how firms in a monopolistcally competitive market set output
 Describe characteristics and give examples of oligopoly
 Understand how firms use market power
 List three market practices that the government regulates or bans to protect
competition
 Define deregulation and list its effects on several industries
Unit Review
 learn about demand, consumer desire for a product, and how it is affected by
other economic factors
 explain how supply is one of the basic building blocks of the market place
 explain how supply and demand affect prices
 review the four types of market structures and how the government
intervenes to protect competition, a key element of free enterprise, in the
marketplace
Unit Assessment
There are no objectives for this lesson.
3. Business and Labor
1. Sole Proprietorships
 Explain the characteristics of sole proprietorships
 Analyze the advantages of a sole proprietorship
 Analyze the disadvantages of a sole proprietorship
2. Partnerships
 Compare and contrast the different types of partnerships
 Analyze the advantages of partnerships
 Analyze the disadvantages of partnerships
3. Corporations and Mergers
 Explain the characteristics of corporations
 Analyze the advantages of incorporation; Analyze the disadvantages of
incorporation
 Compare and contrast corporate combinations
4. Other Organizations
 Understand how a business franchise works
 Identify the different types of cooperative organizations
 Understand the purpose of nonprofit organizations, including professional and
business organizations
5. Labor Market Trends
 Describe how trends in the labor force are tracked
 Analyze past and present occupational trends
 Summarize how the U.S. labor force is changing
 Identify and explain trends in the wages and benefits paid to U.S. workers
6. Labor and Wages
 Analyze the relationship between supply and demand in the labor market
 Understand the connection between wages and skill levels
 Explain how laws against wage discrimination affect wage levels
 Describe other factors affecting wages, such as minimum wage and workplace
safety laws
7. Organized Labor
 Describe why historically some American workers have joined labor unions
 Trace the history of the labor movement in the United States
 Analyze reasons for the decline of the labor movement
 Explain how labor and management negotiate contracts
8. Unit Review
 Learn how and why economists study the composition of the country's labor
force
 Explain the impact of supply and demand on labor and wages
9. Unit Assessment
There are no objectives for this lesson.
4. Money, Banking, and Finance
1. Money
 Describe the three uses of money
 Explain the six characteristics of money
 Understand the sources of money's value
2. The History of American Banking and Banking Today
 Describe the shifts between centralized and decentralized banking before the
Civil War
 Explain how the banking system was stabilized in the later 1800s
 Describe developments in banking during the twentieth century
 Explain how the money supply in the United States is measured
 Explain the functions of financial institutions
 Identify different types of financial institutions
 Understand the changes brought about by electronic banking
3. Saving and Investing
 Understand how investing contributes to the free enterprise system
 Explain how the financial system brings together savers and borrowers
 Describe how financial intermediaries link savers and borrowers
 Identify the trade-offs among risk, liquidity, and return
4. Bonds and Other Financial Assets
 Describe the characteristics of bonds as financial assets
 Identify different types of bonds
 Describe the characteristics of other types of financial assets
 Explain four different types of financial asset markets
5. The Stock Market
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Understand the benefits and risks of buying stock
Describe how stocks are traded
Identify how stock performance is measured
Explain the causes and effects of the Great Crash of 1929
6. Unit Review
 Learn how economists define money
 Study how banks and other institutions help channel money from savers to
investors
7. Unit Assessment
There are no objectives for this lesson.
5. Measuring Economic Performance
1. Gross Domestic Product
 Identify National Income and Product Accounts (NIPA)
 Explain how gross domestic product (GDP) is calculated
 Explain the difference between nominal and real GDP
 List the main limitations of GDP
 Describe other income and output measures
 Identify factors that influence GDP
2. Business Cycles
 Identify the phases of the business cycle
 Describe four key factors that keep the business cycle going
 Explain how economists forecast fluctuations in the business cycle
 Analyze the impact of business cycles in U.S. history
 Analyze why U.S. business cycles may change in the future
3. Economic Growth
 Analyze how economic growth is measured
 Understand capital deepening and how it contributes to economic growth
 Analyze how saving and investment are related to economic growth
 Summarize the impact of population growth, government, and foreign trade on
economic growth
 Identify the causes and impact of technological progress
4. Unemployment
 Describe frictional, seasonal, structural, and cyclical unemployment
 Describe how full employment is measured
 Explain why full employment does not mean that every worker is employed
5. Inflation
 Explain the effects of rising prices
 Understand the use of price indexes to compare changes in prices over time
 Identify the causes and effects of inflation
 Describe recent trends in the inflation rate
6. Poverty
 Define who is poor, according to government standards
 Describe the causes of poverty
 Analyze the distribution of income in the United States
 Summarize government policies intended to combat poverty
7. Unit Review
 Learn how economists measure the health of the economy
 Study the impact a recession has on workers and businesses
 Define inflation
 Identify what makes the economy grow
8. Unit Assessment
There are no objectives for this lesson.
6. Government and the Economy
1. Taxes
 Understand how the government uses taxes to fund programs; Identify the
roots of the concept of taxation in the United States Constitution
 Describe types of tax bases and tax structures; List the characteristics of a
good tax
 Identify who bears the burden of a tax
 Describe the process of paying individual income taxes
 Explain the basic characteristics of corporate income taxes
 Understand the purpose of Social Security, Medicare, and unemployment taxes
 Identify other types of taxes
2. Federal, State, and Local Taxes and Spending
 Distinguish between mandatory and discretionary spending
 Describe major entitlement programs; Identify categories of discretionary
spending
 Explain the impact of federal aid to state and local governments
 Explain how states use a budget to plan their spending
 Identify where state taxes are spent
 List the major sources of state tax revenue
 Describe local government spending an sources of revenue
3. Understanding Fiscal Policy
 Describe how the government uses fiscal policy as a tool for achieving its
economic goals
 Explain how the government creates the federal budget
 Analyze the impact of fiscal policy decisions on the economy
 Identify the limits of fiscal policy
4. Fiscal Policy Options
 Compare and contrast classical economics and Keynesian economics
 Explain the basic principles of supply-side economics
 Understand the role that fiscal policy has played in American history
5. Budget Deficits and the National Debt
 Explain the importance of balancing the budget
 Analyze how budget deficits add to the national debt
 Summarize the problems causes by the national debt
 Identify how a government can reduce budget deficits and the national debt
6. The Federal Reserve System and its Functions
 Understand banking history in the United States; Explain why the Federal
Reserve Act of 1913 led to further reform
 Explain the structure of the Federal Reserve System
 Describe how the Federal Reserve serves the federal government
 Describe how the Federal Reserve serves banks
 Describe how the Federal Reserve regulates the banking system
 Understand the Federal Reserve's role in regulating the nation's money supply
7. Monetary Policy Tools
 Describe the process of money creation
 Explain how the Federal Reserve uses reserve requirements, interest rates,
and open market operations to implement U.S. monetary policy
 Understand why some monetary policy tools are favored over others
8. Monetary Policy and Macroeconomic Stabilization
 Understand how monetary policy works
 Explain the problems of timing and policy lags in implementing monetary
policy
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Explain how predictions about the length of a business cycle affect monetary
policy
 Describe two distinct approaches to monetary policy
9. Unit Review
 Learn how governments gather and spend financial resources
 Examine the actions that the government sometimes takes to help ensure the
health of the nation's economy
10. Unit Assessment
There are no objectives for this lesson.
7. The Global Economy
1. Why Nations Trade
 Analyze the locations of resources and evaluate the significance of these
locations
 Explain the concepts of absolute and comparative advantage and apply the
concept of comparative advantage to explain why and how countries trade
 Analyze the impact of U.S. imports and exports on the United States and its
trading partners
 Describe the effects of trade on employment
2. Trade Barriers and Agreements
 Define various types of trade barriers
 Compare the effects of free trade and trade barriers on economic activities
 Understand arguments in favor of protectionism
 Evaluate the benefits and costs of participation in international trade
agreements
 Explain the role of multinations in the global market
3. Measuring Trade
 Analyze how changes in exchange rates of world currencies affect international
trade
 Describe the effect of various exchange rate systems
 Analyze the effects of changes in exchange rates on the balance of trade
4. Levels of Development
 Understand what is meant by developed nations and less developed countries
 Identify the tools used to measure levels of development
 Describe the characteristics of developed nations and less developed countries
 Understand how levels of development are ranked
5. Issues in Development
 Identify the causes and effects of rapid population growth
 Describe the effects of the unequal distribution of the factors of production
 Understand the importance of human capital to development
 Analyze how political factors and debt are obstacles to development
6. Financing Development
 Understand the role investment plays in development
 Identify the purposes of foreign aid
 Describe the functions of various international economic institutions
7. Transitions to Free Enterprise
 Identify some important steps in moving from a centrally planned economy
toward a free market economy
 Describe the political and economic changes that have taken place in Russia in
recent decades
 Describe the actions that China's communist government has taken to
introduce free market reforms into China
8. Unit Review
 Learn why nations trade
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Explore what actions nations take to restrict or increase trade
Examine why standards of living vary greatly from country to country
Study the impact of the global economy on everyone's future
9. Unit Assessment
There are no objectives for this lesson.
8. Economics Final Exam
1. Economics Final Exam Review
 Decide which strategies you will use to prepare for your exam
 Organize your time and study materials
 Review your notes, keywords and vocabulary terms, and all important
concepts that may be covered on this exam
2. Economics Final Exam
There are no objectives for this lesson.