Unit 10 civic test(No vocab)

Know the three different types of resources.

1. Natural Resources - Resources straight from the source

2. Labor - Work done by others

3. Capital - Goods made to make other goods

Know how to look at a PPC/PPF(Production possibility curve/Production possibility frontier) graph and determine efficiency/inefficiency. 

Point on the curve: Efficient 

Point inside the cure: Inefficient

Point outside the curve: Impossible

Know how to tell the difference between the economic systems. 

Traditional Economy - Economy based on the customs and tradition

Closed Economy - An Economy that operates by itself

Market Economy - Economy that goods and services are traded with government

Given a scenario, be able to identify if supply/demand increases/decreases and know how that affects equilibrium price/quantity. 

Change Equilibrium Price Equilibrium Quantity

Demand Increase Increases Increases

Demand Decrease Decreases Decreases

Supply Increase Decreases Increases

Supply Decrease Increases Decreases

Demand in.-Shifts right

Demand de.-Shifts left

Supply in.-Shifts right

Supple de.-Shifts left

Given a product, be able to identify if demand is relatively elastic or inelastic. 

• Elastic demand: Consumer demand changes when price for good/service change

• Inelastic demand: Consumer demand for product don’t change with change in price

Given a scenario, know which of a price ceiling or a price floor is best used. 

Price ceiling-When the equilibrium price gets too high

Price floor-When the equilibrium price gets too low

 Given an industry, be able to determine which of the three models best describes the industry.

A market…

Monopolies- one supplier of a good or service

Oligopoly- a few producers that dominate

Pure Competition-multiple producers supply identical goods or services 

Know the definitions of inflation and stagflation. 

Inflation - steady increase in the prices of goods and services 

Stagflation- steady increase in the prices of goods and services combined with unemployment and low consumer demand

Know the definitions of stocks and bonds.

Bonds- Certificates purchased for one price with the understanding that the seller will buy it back later at a higher, specified price

Stocks- Partial ownership of a corporation, Sold by the corporation itself

 Given a chart containing MR(Marginal revenue), MC(Marginal cost), and TC(Total Cost) be able to determine profit maximizing quantity. 

Look for where MR and MC curve intersect- This is da profit maximizing quantity. (MR usually linear and MC usually exponential or parabola parabola, LOOK OUT FOR THESE CURVES!!!)