UNIT I STUDYGUIDE

Helpful Hints: The upcoming quest will take the form of multiple choice, true/false, fill-in-the blank, and matching questions. You will be expected to be able to graph the production possibilities frontier often known as “guns vs. butter” In order to study for this test, I would recommend looking over your class notes, worksheets from your SSG and from class, outside readings, and your textbook (Chpts. 1-2). All of these materials will help you study for the test. In addition, I have provided a list of key terms and questions. Knowing the significance of these terms and questions (which have been taken directly from many of the questions on the test) will help you prepare for the test but not be the end all, be all, of the test. The test comes strictly from lectures, class activities, homework, and the book.

Absolute Advantage

Adam Smith

Advantages of the Market Economy

Capital

Capitalism

Capital Goods

CELL (what does it stand for?)

Classical School of Economics

Command Economy

Communism

Comparative Advantage

Competition

Consumer Goods

Cost Benefit Analysis

Demand Side Economics

Economic Schools of Thought

Economic System

Efficiency

Entrepreneur

Externalities

Factors of Production

Guns vs. Butter

Incentives

Invisible Hand

John Maynard Keynes

Karl Marx

Keynesian Economics

Labor

Land

Marginal Costs

Market Economy

Marxist

Mercantilists

Microeconomics

Milton Friedman

Mixed Economy

Monetarist

Opportunity Costs

Paradox Value

PPF/PPC Graph KNOW HOW TO DRAW

(also know- efficiency; underutilization; and production impossibility)

Production Possibilities Frontier

Scarcity

Supply Side Economics

Three Fundamental Economic Questions:

Thinking on the Margin

Thomas Malthus

TINSTAAFL

Trade-offs

Traditional Economy