Economics Unit 1 Review
- What is the major economic problem faced by every society?
- What are the three basic questions of economics?
- What are the four factors of production?
- What is economics?
- What is the production possibilities curve?
- What is necessary to reach the production possibilities frontier?
- Is it possible to go beyond the production possibilities frontier? How?
- Describe the basic characteristics of economic systems, including, property rights, incentives, economic freedom, competition, and the role of government, for both market and command economies.
- Compare communism, socialism and free enterprise.
- Identify the theories of Adam Smith, Friedrich Hayek, Milton Friedman and John Maynard Keynes. Analyze their importance to the free enterprise system today.
- Describe the roles of resource owners and firms in a circular-flow model of the economy.
- How does government raising and lowering taxes, borrowing money, or otherwise changing the flow of money affect circular-flow?
- How is the circular-flow model for America affected by the rest of the world?
Key Vocabulary/Documents/People
Adam Smith / free market / production-possibilities curve
capital goods / free-enterprise economy / profit/profit motive
capitalism / Friedrich Hayek / scarcity
circular flow model / human capital / services
communist System / John Maynard Keynes / socialist system
competition / labor / specialization
consumer goods / market / trade-offs
cost-benefit analysis / Milton Friedman / utility
division of labor / mixed economy / value
entrepreneurship / need / want
factors of production / opportunity costs / wealth