Civics-Economics

1
Civics-Economics

• Test Review
• Test Date 4/22/08
• 60 Questions/180 Points

2
The Basic Economic Problem

• Scarcity
• All resources are scarce so all goods and
  services are scarce.

3
Needs v. Wants

• Needs are things that you have to have for
  survival.
• A want is anything else.

4
Goods v. Services

• Goods are physical and tangible objects.
• Services are actions or activities that a person
  performs for another.

5
Factors of Production

• Land
• Labor
• Capital

6
Three Basic Economic Questions

• What to produce?
• How to produce?
• For whom to produce?

7
Opportunity Cost

• The most desirable alternative to a chosen
  activity.
• Production possibilities graph
• Efficiency
• Underutilization
• Guns or Butter Decision

8
Entrepreneur

• Risk-taker that starts a business.

9
Adam Smith

• Laissez-Faire
• Wealth of Nations

10
Economic Systems

• Traditional
• Command
• Market
• Mixed

11
Law of Demand

• Consumers will buy more goods and services at
  lower prices.

12
Law of Supply

• Producers will be willing to produce more when
  they can charge higher prices.

13
Equilibrium

• Price where supply and demand are equal (no
  shortage or surplus)

14
Disequilibrium

• Price where supply and demand are not equal
  (creates a surplus or a shortage)

15
Business Organizations

• Sole Proprietorship
• Partnership
• Corporations (stock/dividends)
• You should know the percentage each organization
  represents as well as the advantages and
  disadvantages.

16
Corporate Mergers

• Horizontal
• Vertical
• Conglomerate

17
Inflation

• What is it?
• Demand-pull
• Cost-push
• CPI and market basket

18
Gross Domestic Product

• What does it measure?
• Export
• Import

19
Unemployment

• Structural
• Frictional
• Seasonal
• Cyclical
• Underemployment

20
Business Cycle

• What is it?
• Expansionary
• Peak
• Contractionary
• Trough
• What happens to GDP and unemployment during each
  phase?
• Recession
• Stagflation

21
Monetary Policy

• What is it?
• Expansionary Purpose
• Expansionary Tools
• Contractionary Purpose
• Contractionary Tools

22
Fiscal Policy

• What is it?
• Expansionary Purpose
• Expansionary Tools
• Contractionary Purpose
• Contractionary Tools