Download Unit 3 Study Guide

CP Econ Unit 2 Study Guide
AP Government- McCoy
Due Date:
Check off complete sections
_____ Read Chp 4 – Demand
_____ Key Terms and Concepts to study
1. Demand
2. Law of demand
3. Substitution effect
4. Income effect
5. Market demand schedule
6.
7.
8.
9.
10.
Normal good
Inferior good
Complements
Substitutes
Elasticity of demand
11. Inelastic
12. Elastic
_____ On a separate sheet of paper answer the following questions. Restate the question to receive full credit.
1. Think of a good, like gasoline, for which demand can become more elastic over time. What changes can take
place in the long term to affect demand?
2. What are three characteristics of a demand curve?
3. List and describe three causes for shifts in the demand curve.
4. What are complements in demand? Provide an example.
5. Explain elasticity of demand in your own words.
6. What are the four factors that affect elasticity?
7. Will there always be a demand for inferior goods? How could demand for inferior goods decrease?
______ Read Chp 5- Supply
______ Key Terms and Concepts to study
1. Supply
2. Law of supply
3. Quantity supplied
4. Variable
5. Market supply schedule
6. Elasticity of supply
7. Marginal product of
8.
9.
10.
11.
labor
Fixed cost
Variable cost
Total cost
Marginal cost
12.
13.
14.
15.
Marginal revenue
Operating cost.
Subsidy
Excise tax
______ On a separate sheet of paper answer the following questions. Restate the question to receive full credit.
1. Name and describe three factors that can cause a change in supply.
2. What are substitutes in production? Provide an example.
3. What are complements in production? Provide an example.
4. Compare the two terms increasing marginal returns and diminishing marginal returns. Describe two
scenarios, one to explain and demonstrate each term.
5. How can the global economy affect the supply of a good in the U.S.?
______ Read Chp 6- Prices
______ Key Terms and Concepts to study
1. Disequilibrium
2. Excess demand
3. Excess supply
4. Price ceiling
5. Price floor
6.
7.
8.
9.
10.
Rent control
Surplus
Surcharge
Search costs
Supply shock
11. Rationing
12. Black market
13. Spillover costs
______ On a separate sheet of paper answer the following questions. Restate the question to receive full credit.
1. Explain the characteristics of rationing.
2. List three reasons why a price-based system works more efficiently than central planning. Explain your
answers.
3. Explain how prices act as a “language” in the free market system.
4. Identify the problems a price floor can cause.
5. Why might the government interfere with a market economy by setting prices? Provide examples of
government interference.
______ Read Chp 7- Market Structures
______ Key Terms and Concepts to study
1. Perfect competition
2. Monopoly
3. Government Monopoly
4. Oligopoly
5. Natural Monopoly
6. Non Price Competition
7.
8.
9.
10.
11.
12.
Cartel
Price Fixing
Collusion
Patent
Commodities
Price Discrimination
13.
14.
15.
16.
17.
Economies of Scale
Deregulation
Trust
Antitrust laws
Merger
______ On a separate sheet of paper answer the following questions. Restate the question to receive full credit.
1. Explain the 5 characteristics of perfect competition.
2. How does the U.S. government intervene in regard to monopolies and competition?
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*Dates subject to change
**Test and quizzes may include but are not limited to the material above.