Economic Systems
Choice - Ch 2
Understanding Graphs
That's Deep
What's the Big Idea?
Strictly Vocab
Random Pop Culture
100
Products going out of a country, Products coming into a country. Two terms, explained.
Imports come into a country. Exports go out to other countries.
100
In order to get something, I often have to give up something else. It's a trade off.
Opportunity Cost
100
The spot on the graph where the quantity demanded is equal to the quantity supplies.
Equilibrium
100
The laws of supply and demand.
Law of supply: As price increases, more product will be supplied (and vice versa).
Law of demand: As price increases, less product will be demanded (and vice versa).
100
The big idea authored by Adam Smith in Wealth of Nations that we learned really early on.
Division of labor benefits production through specialization of tasks. Instead of one worker performing every task, one becomes experienced and together the process becomes exponentially more productive.
100
The study of how humans make decisions in the face of scarcity
Economics
100
The title of Lorde's most famous hit.
Royals
200
In a command economy, the _____ primarily allocates resources through central planning.
Government
200
If country A can produce 50 jets and county B can produce 40 jets, who has the absolute advantage?
Country A
200
What is the name of the economist and philosopher who described economics through theories and models?
John Maynard Keynes
200
What it is called and why it is done when we analyze the effect of 1 change at a time instead of several.
Ceteris Paribus. It means all else being equal. By only looking at the effect of one change, we can understand how the supply and demand change. If we looked at many factors, we wouldn't know exactly which ones affected the results.
200
What's the big deal with economies of scale?
When an industry makes more of an item, they benefit because though there is more variable cost for each item, the fixed costs remain the same. Thus, the unit cost is lowered with the more produced.
200
Scarcity
The fact that resources are limited. There is not enough to satisfy our wants and needs.
200
Marvel character who had a famous line: "I can do this all day."
Captain America
300
An explanation of underground economies and when they are more likely to occur.
The black market. The trading of goods and services that are illegal. The more strict an economy by the government, the more underground economies exist.
300
What is the definition of absolute advantage?
Absolute advantage is the ability to produce more with the available number of resources
300
The relationship between price and quantity for BOTH supply and demand (2 separate answers).
Supply shows a direct relationship. Demand shows an indirect relationship.
300
How to use the four step process to determine the change in equilibrium.
1. Draw a before graph of S and D
2. Decide whether it affects S or D
3. Decide whether it causes a shift right or left and sketch the graph
4. Identify the new Equilibrium and determine if the price increased or decreased and if the quantity increased or decreased
300
What's the big idea about sunk costs?
Sunk costs are those that cannot be recovered. They happened in the past and should not affect future decisions. Decisions should be based on what will happen in the future.
300
Demand and Supply
Demand is the amount that a consumer is willing and able to purchase at any given price. Supply is the amount a producer is willing to provide at any given price.
300
Which 2020 Netflix documentary series became a global sensation for its bizarre story about a feud between exotic animal owners?
Tiger King
400
Economic system characterized by private ownership of the means of production, limited government intervention, and reliance on markets to allocate resources?
Market economy
400
What does it mean when a group has the comparative advantage?
It means that they can produce a product with the lowest opportunity cost
400
Explain this graph.
Households require goods and services. They need money to get them from businesses. They work (labor) for businesses to get money (wages). Businesses sell the goods and services to satisfy the needs and wants of households.
400
Three things that could cause a SHIFT IN DEMAND.
Any 3 of the following:
1. Income
2. Changing tastes or preferences
3. Changes in the population
4. Prices of substitutes or complements
5. Changes in future expectations
400
What's the big idea about normal products vs. inferior products?
When income rises, consumers will purchase more normal goods. However, they will purchase LESS inferior goods. More money -> better things. Less money, more icky things.
400
Macro vs. Micro economics
Macro economics is the study of economics on a world or national scale. Micro economics is the study at the household or business level.
400
What artist won the 2023 Grammy for best song?
Billie Eilish
500
Which statement is NOT true about the "invisible hand" concept in a market economy?
(a) Consumers and producers are guided by self-interest. (b) Prices act as signals that coordinate economic activity. (c) Government intervention is minimal to maximize efficiency. (d) The outcome may not always be optimal for society as a whole.
(c) Government intervention is minimal to maximize efficiency.
500
Country Cars Jets
Alpha 100 20
Beta 50 25
Who has the comparative advantage for jets in this situation?
Alpha has the comparative advantage (They can still make 100 cars when making 20 jets, beta making 50 is not as good even though they can make 25 jets)
500
What exactly is this graph showing as surplus and shortage?
A shortage is when the qty demanded is greater than the qty supplies. A surplus is when the qty supplies is greater than the qty demanded.
500
TWO factors that could affect a SHIFT IN SUPPLY.
Any 2 of the following:
1. Price of Inputs
2. Price of Substitutes
3. Number of Suppliers
4. Technology
5. Expected Prices in the Future
500
What's the big idea regarding normative and positive statements.
Normative statements are opinions. Positive statements are based on facts.
500
Consumer and producer surplus
Consumer surplus: the amount that individuals would have been willing to pay minus the amount that they actually paid.
Producer surplus: the amount that consumers actually paid minus the amount producers would have been willing to accept
500
Which celebrity made headlines in 2023 for being the first to reach 400 million Instagram followers?
Selena Gomez
1000
In a mixed economy, which of the following is most likely to be provided by the government?
(a) Luxury goods like designer clothes (b) Basic necessities like public education (c) Production of specialized industrial machinery (d) Development and marketing of new consumer electronics
(b) Basic necessities like public education
1000
The difference between the Law of Diminishing Marginal Utility and the Law of Diminishing Returns
Law of diminishing utility: As a person receives more of a good, the additional (or marginal) utility from each additional unit of the good declines
Law of diminishing marginal utility: As a person receives more of a good, the additional (or marginal) utility from each additional unit of the good declines
1000
This diagram shows the productivity efficient combinations of two products that an economy can produce.
Production Possibilities Frontier
1000
An explanation of why it is often better for a country to import some of a product instead of producing it themselves. Hint: the answer is not simply "It can be cheaper."
A country could have a larger opportunity cost if they choose to produce more of a product. This means they do not have a comparative advantage vs. another country. It is too costly to make less of something else in order to make that product, so it's better to import it!
1000
What's the big idea about price controls including price floors and price ceilings?
The big idea is that gov't will intervene to set a maximum price (floor) that a company can charge for a product or a minimum price to be charged by a company for a product (ceiling). Economists say that these do not really help the economy and cause deadweight loss.
1000
This MA examines the benefits and costs of choosing a little more or a little less of a good.
Marginal Analysis
1000
What are the names of the two rappers whose feud has continued to escalate over the last decade and got a lot of press this past year.
Drake and Kendrick Lamar