Economics Review Outline
Definition of Economics:
Definition of Microeconomics/Definition of Macroeconomics:
Resources and scarcity
· factors of production
Opportunity Cost vs. Tradeoff:
· How are they alike?
· How are they different?
Production Possibilities Graph
o Draw and label the axes/Draw the frontier line
o Explain the law of increasing opportunity cost
o Explain how the frontier could be shifted outward
o Label a point for underutilization, efficiency, and unattainable production
How do the economic systems answer the 3 economic questions?
Construct a Circular Flow Diagram for a Free Market Economy. Include the following:
· Label the households and businesses
· Label the product market and factor market
· Indicate the physical flows/money flows.
Public Goods and Externalities
Demand vs. Quantity Demanded
· changes in quantity demanded vs. shifts in demand (curves)
· substitution effect
· income effect
· substitutes/compliments: effects of one on the other
· elasticity
Supply vs. Quantity Supplied
· changes in quantity supplied vs. shifts in supply (curves)
· production costs
· elasticity and time
Pricing mechanism in the free enterprise market
· establish equilibrium price
· disequilibrium and shortages or surplus
· shifts in supply and demand, and the impact on market price.
· Unequal distribution of goods and services in the free market.
The 4 types of markets structures & characteristics of each
4 types of businesses and characteristics of each
Determining Worker’s Earnings AND preparing yourself for the job market
Uses/Characteristics of money
Business Cycle stages
Gross Domestic Product
· How it's computed
· Real GDP/Real GDP Per Capita
Inflation
· Types/Effects
· How Computed
Unemployment
· Types of unemployment
· Dangers of high/low unemployment (wage-price spiral)
3 Taxes Structures
Fiscal Policy tools:
· Expansionary/Contractionary
· National Debt/Deficit
Monetary Policy
· How banks create money
· Role of Federal Reserve
· 3 tools of monetary policy: expansionary/contractionary
Comparative Advantage vs. Absolute Advantage
Trade Barriers (types)
Currencies and Exchange rates
Banking and Investments
What is credit and how do lenders decide if I can get credit?
Interest rates
Information on a credit card statement
Obtaining/understanding a credit report (credit history)
What are the benefits of insurance? What type should I get?