- Why are all goods and services scarce? a. Some goods have a greater opportunity cost than others...

- Why are all goods and services scarce?a. Some goods have a greater opportunity cost than othersb. All people have unlimited wants, but limited resources to satisfy those wantsc. Some things are needs and others are wantsd. Some people want to have more goods than others

Explanation: scarcity is defined as ____________ wants given _____________ resources, no one can have an unlimited amount (time, rest, vacation, stuff, etc) of any given thing.

Economics Daily Ten #1

unlimited

limited

SSEF1 a

- Why are all goods and services scarce?a. Some goods have a greater opportunity cost than othersb. All people have unlimited wants, but limited resources to satisfy those wantsc. Some things are needs and others are wantsd. Some people want to have more goods than others

- An individual decides to pay $8 to see a movie instead of buying an $8 meal. What is the opportunity cost of the movie?

a. the satisfaction missed by not eating the mealb. the $8 paid to see the moviec. the time spent watching the movied. the satisfaction received by going to the movie

Explanation: Opportunity cost measures the cost of the ____________ valued alternative forgone.


SSEF1 b

- An individual decides to pay $8 to see a movie instead of buying an $8 meal. What is the opportunity cost of the movie?

a. the satisfaction missed by not eating the mealb. the $8 paid to see the moviec. the time spent watching the movied. the satisfaction received by going to the movie

highest

• The probable impact of corporate downsizing is a movement frompoint X toA. point MB. point NC. point OD. point P

Economics Daily Ten #3• Study the graph below and use it to answer the following question.

• The probable impact of corporate downsizing is a movement frompoint X toA. point MB. point NC. point OD. point P

Explanation: The PPF model shows the production possibilities between two goods. It is a visual illustration of ______________________.opportunity cost

Economics Daily Ten #4• Study the model below and use it to answer the following question.

• The entry of women into the American labor force during World War II was oneimportant reason for

A. a shift from curve CD to point GB. a shift from curve EF to curve CDC. a movement from point Y to point ZD. a shift from curve CD to curve EF

Explanation: An increase in the factor of production of __________ would increase the work force and ability to produce at a greater level.

A. a shift from curve CD to point GB. a shift from curve EF to curve CDC. a movement from point Y to point ZD. a shift from curve CD to curve EF

labor

- An economy where the three economic questions are based on decisions made by consumers and businesses, with government intervention is an example of a _____________ economic system.

a. Marketb. Mixedc. Traditionald. Command

Economics Daily Ten #1 - An economy where the three economic questions are based

on decisions made by consumers and businesses, with government intervention is an example of a _____________ economic system.

a. Marketb. Mixedc. Traditionald. Command

Explanation: – ____________ economies, such as the U.S., rely on ______________ and _________ to answer the three economic questions. The government plays the role of protector, overseer and regulator of the economy.

MixedConsumers Firms

- Fill in the blanks for each of the following:1. QB Peyton Manning’s high salary, vs. a cashier’s low salary,

represents economic _________.2. Moving from the personal computer to handheld devices

represents an economic _________.3. “Today, I know Chevron will have gas” represents economic

___________.4. GM receiving a government bailout represents economic

____________.5. Increasing the production of goods, services and jobs would

represent economic ________.

Word Bank: innovation, predictability, growth, security, equity.


equity

innovation

predictability

security

growth

Economics Daily Ten #3• Which of the following is MOST important for economic growth?

a. an efficient use of resourcesb. ample tax revenuesc. availability of resourcesd. a large labor force

• In the American economy, the goal of economic equity is MOST connected with

a. restoring laissez-faire capitalismb. creating limits on corporate profitsc. subsidizing businesses that would otherwise faild. giving participants a fair chance to succeed

Explanation: economic _____________ allows society to maximize resources and increase production.

Explanation: In the U.S. economic equity refers to a ________ opportunity for obtaining jobs and being paid based on your _____________.

• Which of the following is MOST important for economic growth? a. an efficient use of resourcesb. ample tax revenuesc. availability of resourcesd. a large labor force





efficiency

fairskills

Economics Daily Ten #4• In a market economy, how are the basic economic questions of what,

how, and for whom to produce answered?a. by using a nation’s social customs and traditionsb. by using a combination of traditional and command economiesc. by the individuals and firms in the nation’s marketplaced. by the nation’s federal and/or local governments

• A market economy has an advantage over a traditional economy in that the market economya. controls prices and wagesb. fixes incomes of consumersc. limits the profits of large corporationsd. adjusts to consumer demands over time

Explanation: a market economy answers the three economic questions through the decisions of ___________ and _____________. Consumer purchases indicate to the firm what should produced.

• In a market economy, how are the basic economic questions of what, how, and for whom to produce answered?a. by using a nation’s social customs and traditionsb. by using a combination of traditional and command economiesc. by the individuals and firms in the nation’s marketplaced. by the nation’s federal and/or local governments

• In a market economy, how are the basic economic questions of what, how, and for whom to produce answered?a. by using a nation’s social customs and traditionsb. by using a combination of traditional and command economiesc. by the individuals and firms in the nation’s marketplaced. by the nation’s federal and/or local governments

• A market economy has an advantage over a traditional economy in that the market economya. controls prices and wagesb. fixes incomes of consumersc. limits the profits of large corporationsd. adjusts to consumer demands over time

Individuals Firms


The flow of goods and services to consumers is illustrated byA. 4 to 2B. 8 to 6C. 2 to 5D. 6 to 1Explain: ____________circles represent the flow of money,___________ circles represent the flow of inputs and outputs.

The flow of goods and services to consumers is illustrated byA. 4 to 2B. 8 to 6C. 2 to 5D. 6 to 1

Outer Inner

Economics Daily Ten #61. What is the function of an economic system?

a. to make sure all people have equal access to goodsb. to organize and distribute scarce resources c. to give all producers the same access to consumersd. to make sure people are paid for their labor

2. You are an entrepreneur with an innovative idea for a new business. In which kind of economy would you have the most opportunity to try to achieve success?a. market economyb. command economyc. traditional economyd. economy of scale

Explanation: – a _______________ economy would offer the greatest degree of economic freedom.

market

1. What is the function of an economic system?a. to make sure all people have equal access to goodsb. to organize and distribute scarce resources c. to give all producers the same access to consumersd. to make sure people are paid for their labor


1. What is the function of an economic system?a. to make sure all people have equal access to goodsb. to organize and distribute scarce resources c. to give all producers the same access to consumersd. to make sure people are paid for their labor


Economics Daily Ten #7What is the purpose of competition in a market economy?

a. to create centralized control in the marketplace of one businessb. to cause producers to attempt to put each other out of businessc. to cause buyers and sellers to be generous about spending their moneyd. to act as a motivating force behind the free market

Which describes the metaphor of the invisible hand?a. an economy where the 3 economic questions are answered by the governmentb. an influential force where the self-interests of households and firms determine the three economic questions.c. an economy where tradition, ritual and custom determine the factors of productiond. a tangible force behind a modified free enterprise

What is the purpose of competition in a market economy?a. to create centralized control in the marketplace of one businessb. to cause producers to attempt to put each other out of businessc. to cause buyers and sellers to be generous about spending their moneyd. to act as a motivating force behind the free market

Which describes the metaphor of the invisible hand?a. an economy where the 3 economic questions are answered by the governmentb. an influential force where the self-interests of households and firms determine the three economic questions.c. an economy where tradition, ritual and custom determine the factors of productiond. a tangible force behind a modified free enterprise

Economics Daily Ten #8Properly label each component of the circular flow model,

indicating the two markets, two entities and what is represented by each arrow.

Consumer SpendingBusiness Revenue

Income to Households Payments to Households

Consumer

Goods/Services Outputs

Land, Labor, CapitalInputs

Economics Daily Ten #91. The idea that producers make goods that consumers like and are willing

to pay for is a principle of which of the following economic systems?a. Traditionalb. Commandc. Marketd. Socialism

2. In what kind of economy does the government own the means of production?a. Traditionalb. Marketc. Commandd. Mixed

1. The idea that producers make goods that consumers like and are willing to pay for is a principle of which of the following economic systems?a. Traditionalb. Commandc. Marketd. Socialism

1. The idea that producers make goods that consumers like and are willing to pay for is a principle of which of the following economic systems?a. Traditionalb. Commandc. Marketd. Socialism

2. In what kind of economy does the government own the means of production?a. Traditionalb. Marketc. Commandd. Mixed

Economics Daily Ten #10• Kim works on an automobile assembly line. Kim’s job illustrates a production

process that relies on a. autonomous work groupsb. team decision makingc. quality circlesd. division of labor

• If a nation encourages entrepreneurship, then which of the following is likely to occur? a. very little change in overall production of goods and services

b. the development of many new products and process methodsc. fewer applications to the United States Patent Officed. a decline in the number of new businesses started

Explanation: – _______________ is another term for_________________, which focuses on the efficient use of resources

Division of labor specialization

• Kim works on an automobile assembly line. Kim’s job illustrates a productionprocess that relies on a. autonomous work groupsb. team decision makingc. quality circlesd. division of labor

• If a nation encourages entrepreneurship, then which of the following is likely to occur? a. very little change in overall production of goods and services

b. the development of many new products and process methodsc. fewer applications to the United States Patent Officed. a decline in the number of new businesses started

Economics Daily Ten #41. Why does a free market economy need some government intervention?

a. so that the government has total control over factor resourcesb. to ensure the government has the freedom to tax as necessaryc. to make sure that the government can fulfill its needs for goods and servicesd. to provide for things that the marketplace does not address (i.e. market failures)

2. In what kind of economy does the government make all the decisions?a. socialistb. laissez fairec. centrally planned, or command economyd. free enterprise

Explanation: (d) – most modern economies are mixed, or have some government involvement to regulate, protect and oversee.

Explanation: (c) – command economies are controlled by a dictator, or small group of economic policy makers.

Explanation:

Explanation:

- An efficient economy is one that

Explanation: (c) – efficiency is using resources wisely to produce goods and services


Explanation:

a. Has very few people who do not work for a livingb. Makes less use of all its goods and servicesc. Uses the factors of production wisely and not wastefullyd. Makes the least costly use of it resources

Economics Daily Ten #71. The upper line of monetary flow, marked “1”

shows thea. factor marketb. product marketc. supply and demandd. production possibilities frontier

2. The lower half, marked “2” represents the

a. factor marketb. product marketc. supply and demandd. production possibilities frontier

3. Which of the following is not flowing from

the household to the firm in the factor market?a. Landb. Laborc. Capitald. Goods

Economics Daily Ten #1Buyers and sellers willingly engage in a transaction that benefits both

parties because of which concept in economics?a. economic equityb. communismc. voluntary exchanged. property rights

One of the strongest incentives in the market economy is to make money, this is illustrated by the concept of a. property rightsb. profit motivec. voluntary exchanged. division of labor

Explanation: ____________________is the free trade of goods and services and the gains made from trade.

Explanation: ___________________is the motivating factor behind every firm.

Buyers and sellers willingly engage in a transaction that benefits both parties because of which concept in economics?a. economic equityb. communismc. voluntary exchanged. property rights

One of the strongest incentives in the market economy is to make money, this is illustrated by the concept of a. property rightsb. profit motivec. voluntary exchanged. division of labor

Voluntary Exchange

Profit Motive

Economics Daily Ten # 2Someone who does not pay for a public good/service, but benefits from it is

a a. free-loaderb. free-riderc. free-persond. free-bird

Explanation: a _______________is someone who consumes public goods, but does not contribute to the program.

A situation in which the market on its own does not distribute resources efficientlya. market externalityb. market productionc. market failured. market deficit

Explanation: __________________ occur as a result of an inability for the market to answer the three economic questions on its own.

free-rider

market failures

Someone who does not pay for a public good/service, but benefits from it is a a. free-loaderb. free-riderc. free-persond. free-bird

A situation in which the market on its own does not distribute resources efficientlya. market externalityb. market productionc. market failured. market deficit

Economics Daily Ten # 3Exposure to second hand smoke would be an example of a

a. positive externalityb. negative externalityc. negative perspectived. positive incentive

The primary way to improve productivity isa. reduced work ethicb. negative incentivesc. improved technologyd. removal of subsidies from the private sector

Explanation: _________________ are a cost or benefit incurred by a party who was not directly involved in the action causing the cost or benefit.

Explanation: _______________ plays a major role in a society’s productivity, allowing more _______________ to be created with less _______________.

Externalities

Technology

Exposure to second hand smoke would be an example of aa. positive externalityb. negative externalityc. negative perspectived. positive incentive


outputs inputs

Economics Daily Ten # 11Which of the following is a role of the government in a modified free enterprise?

a. ensure that businesses follow certain environmental protection rulesb. ensuring that business obtain market power and determine price fixingc. ensuring that the market is completely deregulated in order to allow competition to flourishd. To actively dismiss the public interest for the concerns of the firms

Explanation: (a) – government plays the role of informer, protector and regulator of the U.S. economy


Explanation: (c) – technology plays a major role in a society’s productivity and growth.

Economics Daily Ten #4Price

Quantity Demanded

• Why is the demand curve downward sloping?a. Because of the positive relationship

between p and qd.b. Because of the inverse relationship

between price and qd.c. Because of the direct relationship

between price and qd.d. Because of negative relationship

between supply and demand.

Explanation: The ________________ relationship between ________ and ____________________ causes a downward sloping curve

P Q P Q

inverse pricequantity demanded

• Why is the demand curve downward sloping?a. Because of the positive relationship

between p and qd.b. Because of the inverse relationship

between price and qd.c. Because of the direct relationship

between price and qd.d. Because of negative relationship

between supply and demand.

Price

Quantity Demanded

P1

P2

Q1 Q2

PriceEconomics Daily Ten #2

• Respectively, what do the above graphs illustrate?a. A change in quantity demanded/a change in demandb. A change in demand/a change in demandc. A change in quantity demanded/a change in quantity demandedd. A change in demand/a change in quantity demanded

Quantity Demanded

• Respectively, what do the above graphs illustrate?a. A change in quantity demanded/a change in demandb. A change in demand/a change in demandc. A change in quantity demanded/a change in quantity demandedd. A change in demand/a change in quantity demanded

Explanation: A change in price causes movement along the curve, a change in the determinants of demand cause a shift.

Economics Daily Ten #3Test Your UnderstandingEach of the following represents an analysis of the demand for the American automobile industry1. In each of the following cases, state whether

(1) there is a movement along the demand curve for American automobiles, (2) the demand curve for American automobiles will shift to the right,(3) the demand curve for American automobiles will shift to the left

1. The price of gasoline rises ________________________2. The price of American automobiles rises ________________________3. The price of Japanese automobiles rises ________________________4. Buyers' incomes fall ________________________5. Buyers find that American automobiles are of higher quality __________________6. Mexican automobile buyers are now able to buy American automobiles _____________________7. Buyers expect that the price of American automobiles will drop next year _____________________8. The price of American automobiles drop ____________________

(3) – Shift to the left(1) – Movement along

(2) – Shift to the right(3) – Shift to the left

(2) – Shift to the right(2) – Shift to the right

(3) – Shift to the left(1) – Movement along

Economics Daily Ten #4Event Effect (Change in QD or Change in D) (Shift or Movement)

1. The price of designer clothing increases.

2. The price of designer clothes decreases.

3. The popularity of polo brand clothing increases.

4. The cost of Polo clothing doubles, what is the effect on Hilfiger brand clothing?

5. Consumer’s receive a pay raise; designer clothing is a normal good.

6. Consumer’s expect designer clothing to fall in price in a week.

7. There is a decrease in the population of an area.

Quantity Demanded Movement

Quantity Demanded Movement

Demand Shift to the right



Demand Shift to the left

Demand Shift to the left

Economics Daily Ten # 7Complete the following chart:

Calculate the following using the midpoint method.

Product Elastic or Inelastic Determinant

Gasoline (tomorrow’s prices)

Heinz baked beans

Infiniti G37

Insulin for a diabetic

Q2 – Q1__ ________ (Q2 + Q1)/2 = ____________ = ______ = ______ P2 – P1__ ________ (P2 + P1)/2

Inelastic Time Horizon

Elastic Availability of Substitutes

ElasticNecessity vs. Luxury/Relative ImportanceNecessity vs. Luxury/Relative Importance

Inelastic

300250 30 35

1.2.86

1.4

ElasticElastic or Inelastic ___________

50

20

100 400

Elastic or Inelastic ___________


Calculate the following using the midpoint method.

Product Elastic or Inelastic Determinant

Gasoline (5 years from now)

Food in general

Marlboro Cigarettes

Table Salt

Q2 – Q1__ ________ (Q2 + Q1)/2 = ____________ = ______ = ______ P2 – P1__ ________ (P2 + P1)/2

Elastic Time Horizon

Inelastic Necessity vs. Luxury

Elastic Availability of Close Substitutes

Relative ImportanceInelastic

4080 57.5

.5

.67.75

Inelastic


Quantity Demanded

1. Which of the following is a true statement?a. P1 to P2 represents an increase in price

and decrease in qd.b. P1 to P2 represents a shift in the

demand curve.c. P1 to P2 represents a positive

relationship between price and qd.d. P1 to P2 represents a drop in price and

an increase in qd.

Explanation: (d) Price falls, quantity demanded increases

P1

P2

Q1 Q2


Which situation would cause the shift of the demand curve to shift from D1 to D2?

A – The economy is experiencing a recession and people’s overall income reduces.B – Prices drop for the item being analyzed on the graph.C – Population in the area analyzed by the graph increases by 80%.D – Prices increase for the item being analyzed on the graph.

Explain: List Determinants of Demand:

Price

Quantity Demanded

D1 D2

Explain: List Determinants of Demand: (c) Income, Tastes, Price of Related Products, Expectations, Number of Buyers

Economics Daily Ten # 6Ceteris Paribus means

a. all things changingb. all things remaining constantc. all things constantly changingd. all things remaining changed

Explanation: (b) – The demand curve remains fixed Ceteris Paribus (all other things constant).

A change in the price of an item being analyzed causes (2 answers apply)a. a shift in the demand curveb. a change in quantity demandedc. a change in supplyd. a change in demande. movement along the demand curve

Explanation: (b and e) – price (of an item in study) does not change “demand”.


1. Which of the following statements exhibit demand in economics?a. I love the new Infiniti G37.b. I want to travel to Europe next year, but I’m dead

broke.c. I want to build a deck, so I’m saving the money and

I’m going to buy it this summer.d. I really want to buy a new pair of UGGs, I have the

money, but they are too expensive for me to buy.

Explanation: (c) Demand is the desire, willingness and ability to consume a good or service.


Quantity Supplied

1. Why is the supply curve upward sloping?a. Because of the positive relationship between

p and qd.b. Because of the inverse relationship between

price and qd.c. Because of the direct relationship between

price and qs.d. Because of negative relationship between

supply and demand.

Price

Quantity Supplied

S1 S2

2. Which of the following could cause a shift in the supply curve?

a. The government places an excise tax on the suppliers of the product.

b. The price of the good goes up because demand for the good increases.

c. The number of sellers reduces.d. The government provides an incentive to

produce through increased subsidies.

P QS

P QS

1. Why is the supply curve upward sloping?a. Because of the positive relationship between

p and qd.b. Because of the inverse relationship between

price and qd.c. Because of the direct relationship between

price and qs.d. Because of negative relationship between

supply and demand.

2. Which of the following could cause a shift in the supply curve?

a. The government places an excise tax on the suppliers of the product.

b. The price of the good goes up because demand for the good increases.

c. The number of sellers reduces.d. The government provides an incentive to

produce through increased subsidies.


Scenario Determinant(s) Shift

The government imposes an excise tax on tanning beds. Samsung, Microsoft and Google develop their own line of smart phones.New home builders anticipate a decline in demand and reduce their inventory.Government reduces their payments to farmers.New machinery improves manufacturing efficiency.Gas prices increase.

Taxes/Regulation

Number of Sellers

Future Expectation of Prices

Subsidies

Technology

Input Costs

Left

Right

Left

Left

Right

Left

Economics Daily Ten #31. Draw 4 supply curves to illustrate the likely market response for the auto

industry:a. Technological innovations advance the production process.b. The U.S. government removes subsidies in the auto industry.c. Automakers expect increased willingness to purchase in a month.d. The U.S. government increases taxation, causing several firms to drop out

of the market

Price

QS

S1 S2

Price

QS

S2 S1


1. What is the Pe and Qe respectively at the equilibrium point? a. 50, 6b. 6, 50c. 5, 60d. 60, 5

2. At $3 there would be a _____ of _____ quantity. a. Shortage, 50b. Shortage, 60c. Surplus, 50d. Surplus, 60

QS – QD20 – 80 = - 60

a. 50, 6b. 6, 50c. 5, 60d. 60, 5

a. Shortage, 50b. Shortage, 60c. Surplus, 50d. Surplus, 60


Suppose the government set a price ceiling at $2. 1. What would be the quantity demanded and the quantity supplied? ______________2. The natural market equilibrium is $_______3. In this case the price ceiling is ______ the equilibrium point.4. There would be a shortage/surplus of ____________

QD = 40 QS = 20

belowShortage - 20

3

Economics Daily Ten #6Using a properly labeled graph, illustrate the below current headlines

a) iPhone 4S pre-orders sell out in first 12 hours of availabilityb) Analyst predicts Toyota's sales down 17%, due to past recallc) Worst Texas Drought in 44 Years Damaging Wheat Crop, Reducing Cattle Herdsd) Finally!: Used-car prices are falling due to reduced demand

S

D

Economics Daily Ten #61. Which of the following would most likely be fixed costs for a firm?

a. Salaried workers (someone that is paid a monthly amount based on an annual salary, ie. $50,000)

b. Lease on the building (paid monthly spread out over 10, 20, 30 years, etc.)c. Hourly workers (someone that is paid by the hour, i.e. $13.00 an hour)d. Electricity (cost to power a building, office, etc.)

Explanation: (a, b) fixed costs do not change based on production.

2. Which of the following would most likely be variable costs for a firm?a. Salaried workersb. Lease on the buildingc. Hourly workersd. Electricity

Explanation: (c, d) variable costs change based on production.


Of the following, which situation would cause the shift of the supply curve from S1 to S2?

a. The government reduces subsidies to wheat farmers.b. New fertilizers increase wheat crop yields.c. Firms exit the wheat industry.d. Drought reduces industry output by 25%.

Explanation: (b) Technology, prices reduced, quantity increased

Economics Daily Ten #1 Characterize the following as sole proprietor, partnership or corporation.a. Google, inc. b. Cohen and Cohen Law Firmc. John Doe’s Island Landscaping

Which of the following is not an advantage of a sole proprietorship?a. Easy to start upb. Sole receiver of profitc. Full control of decision-makingd. Unlimited personal liabilitye. Relatively few regulations

Corporation

Partnership

Sole Proprietor

Which of the following is not an advantage of a sole proprietorship?a. Easy to start upb. Sole receiver of profitc. Full control of decision-makingd. Unlimited personal liabilitye. Relatively few regulations

Economics Daily Ten #2Identify the proper term for each of the following:

Scenario Term

1. Vivendi Company purchases Universal Studios, Activision Gaming and MP3.com

2. ESPN and Disney combine into one company

3. Sirius Satellite and XM Radio combine into one company

4. McDonalds in China

5. Marshland Credit Union; owned by its members

6. A purchase of the rights to use Zaxby’s name and product

7. A business that is designed to help society, not make money

8. An organization focused on negotiating for the laborers of a firm

Conglomerate

Vertical Merger

Horizontal Merger

Multinational

Cooperative (Coop)

Business Franchise

Non-Profit

Labor Union

Economics Daily Ten #3Which of the following two are disadvantages of a partnership?a. Easy to start upb. Shared decision making and specializationc. Larger pool of capitald. Potential for conflicte. Unlimited liability

Which of the following two are disadvantages of a corporation?a. Limited liability b. More potential for growthc. Double taxationd. Loss of controle. Long life

Which of the following two are disadvantages of a partnership?a. Easy to start upb. Shared decision making and specializationc. Larger pool of capitald. Potential for conflicte. Unlimited liability

Which of the following two are disadvantages of a corporation?a. Limited liability b. More potential for growthc. Double taxationd. Loss of controle. Long life

Economics Daily Ten #41. Which of the following sets are arranged from most competitive to least competitive?

a. absolute competition, monopolistic competition, imperfect competitionb. perfect competition, oligopoly, monopolistic competition, monopolyc. perfect competition, monopolistic competition, oligopoly, monopolyd. oligopoly, perfect competition, monopolistic competition, monopolye. absolute competition, imperfect competition, monopolistic competition, monopoly

1. Which of the following sets are arranged from most competitive to least competitive?a. absolute competition, monopolistic competition, imperfect competitionb. perfect competition, oligopoly, monopolistic competition, monopolyc. perfect competition, monopolistic competition, oligopoly, monopolyd. oligopoly, perfect competition, monopolistic competition, monopolye. absolute competition, imperfect competition, monopolistic competition, monopoly

2. Describe the following as perfect competition, monopolistic competition, monopoly or oligopolies.

a. Fast food companiesb. Automobile industryc. Agricultural industryd. National Football League

Monopolistic competition

Oligopoly

Perfect competitionMonopoly

Economics Daily Ten #5Identify the proper term for each of the following:

Scenario Term

1. The stock market

2. The clothing industry

3. Major League Baseball

4. The airline industry

5. Identical goods such as tomatoes

6. The ability to control the market and dictate prices

7. When firms charge different customers different prices

8. When firms work together to price-fix

Perfect Competition

Monopolistic Competition

Monopoly

Oligopoly

Commodity

Market Power

Price Discrimination

Collusion

Economics Daily Ten #6 1. Price discrimination occurs when one company

a. offers the same price b. offers one price to one individual and another price to another individualc. offer a price set by a government price ceilingd. offers a price set by a government price floor

2. The level of difficulty incurred by a firm when entering a market is a a. Business Roadblock b. Market Wall c. Barrier to Entryd. Power of the Market

1. Price discrimination occurs when one companya. offers the same price b. offers one price to one individual and another price to another individualc. offer a price set by a government price ceilingd. offers a price set by a government price floor

2. The level of difficulty incurred by a firm when entering a market is a a. Business Roadblock b. Market Wall c. Barrier to Entryd. Power of the Market

Economics Daily Ten #7Which of the following would not be considered Price discrimination?a. Kids eat freeb. Senior citizen discount at a restaurantc. Student discount at the moviesd. 10% discount at Target

Which of the four forms of nonprice competition would reflect the following?a. A new shape for a bottle of cokeb. “Be our guest” Disney mottoc. Ralph Lauren vs. Wal-mart brand clothingd. A fast food restaurant near I-95

Physical CharacteristicsService Level

Advertising, Image, or StatusLocation

Which of the following would not be considered Price discrimination?a. Kids eat freeb. Senior citizen discount at a restaurantc. Student discount at the moviesd. 10% discount at Target

Economics Daily Ten #11. Classify the following components of GDPa. Dell opens a new factory in Seattle, WA. _______________________b. Congress approves the purchase of a new fleet of Boeing Jets. ______________________c. A family buys a new Honda Accord. __________________________d. China imports soybean from the U.S. _________________________

2. All of the following are accurate regarding the definition of GDP EXCEPTa. The market valueb. Of all final goods and servicesc. Produced by a country’s companies, domestically and abroadd. In a given period of time

Investment (I)Government (G)

Consumption (C)Net Exports (NX)

2. All of the following are accurate regarding the definition of GDP EXCEPTa. The market valueb. Of all final goods and servicesc. Produced by a country’s companies, domestically and abroadd. In a given period of time

Economics Daily Ten #21. Complete the following in order to classify the stages of the business cycle

2. Two quarters of economic decline is known as a ______a. Troughb. Recessionc. Depressiond. Recovery

Peak

Contraction

Trough

Expa

nsio

nRecession

Reco

very

2. Two quarters of economic decline is known as a ______a. Troughb. Recessionc. Depressiond. Recovery

Economics Daily Ten #31. What would you conclude about an economy characterized by

increasing real (GDP), low unemployment?a. This economy is in a slowdown.b. The government needs to address the unemployment problem.c. This economy is in the expansion phase of a business cycle.d. This economy is in the trough phase of a business cycle.

1. What would you conclude about an economy characterized by increasing real (GDP), low unemployment?a. This economy is in a slowdown.b. The government needs to address the unemployment problem.c. This economy is in the expansion phase of a business cycle.d. This economy is in the trough phase of a business cycle.

2. What is the best measure of a country’s standard of living?a. Real GDPb. Nominal GDPc. The amount of wealthy peopled. Per Capita GDP

2. What is the best measure of a country’s standard of living?a. Real GDPb. Nominal GDPc. The amount of wealthy peopled. Per Capita GDP

1. Calculate the GDP deflator using the following figures:• Real GDP 2011 ($11.9 trillion)• Nominal GDP 2011 ($14.7 trillion) using the following formula:

Nominal GDP X 100 = Real GDP

__14.7 = _______X 100 = _____ 11.9

1.24 124


2. Calculate Real Per Capita GDP by using the following formula: Real GDP 2009 Total Pop. 2009*2009 Real GDP – $14,658 trillion*2009 Total Pop. – 307 million

_14658_ .307

= _$47,746_

Nominal GDP 2003 - 1470Nominal GDP 2004 - 1830

3. Determine the nominal and real GDP for each year.

Real GDP 2003 - 1470Real GDP 2004 - 1560

Economics Daily Ten #3Country 2011 (Trillions) Population Per Capita GDP Population Rank Per Capita GDP

RankUSA $14.582 307,007,000China $5.879 1,338,000,000

Japan $5.498 127,558,000

Germany $1,740,000,000,000 82,080,000

France $1,340,000,000,000 58,800,000

UK $1,240,000,000,000 58,970,000

Brazil $1,040,000,000,000 169,800,000

Mexico $694,300,000,000 98,550,000

Russia $692,000,000,000 146,860,000

Canada $658,000,000,000 30,680,000

Use the first table to fill in the information, including population.1. Describe how population might affect GDP.2. What does Per Capita GDP tell you about a country's economy and standard of living?4. Based on the table above, which country has the highest standard of living? The lowest?5. Why are the citizens of the countries with high Per Capita GDP more likely to have a better quality of life than other countries?

Economics Daily Ten #3Country 1998 GDP Population Per Capita GDP Population Rank Per Capita GDP

RankUSA $8,080,000,000,000 270,310,000China $4,250,000,000,000 1,240,000,000

Japan $3,080,000,000,000 125,930,000

Germany $1,740,000,000,000 82,080,000

France $1,340,000,000,000 58,800,000

UK $1,240,000,000,000 58,970,000

Brazil $1,040,000,000,000 169,800,000

Mexico $694,300,000,000 98,550,000

Russia $692,000,000,000 146,860,000

Canada $658,000,000,000 30,680,000


$29, 892

$3,427

$24,458

$21,199

$22,789

$21,028

$6,125

$7,045

$4,712

$21,447

1

2

3

4

5

6

7

8

9

10

1

2

3

4

5

6

7

8

9

10

The higher the per capita gdp, the higher the standard of living.

United States, China

Positive Externalities, people benefit from the “spillover” of social benefits created by the pursuit of self-interest.

In general, the larger the population, the larger the gdp.Larger population can reduce per capita gdp.

GDP Country ComparisonCountry 1998 GDP Population Per Capita GDP Population Rank Per Capita GDP

RankUSA $8,080,000,000,000 270,310,000China $4,250,000,000,000 1,240,000,000

Japan $3,080,000,000,000 125,930,000

Germany $1,740,000,000,000 82,080,000

France $1,340,000,000,000 58,800,000

UK $1,240,000,000,000 58,970,000

Brazil $1,040,000,000,000 169,800,000

Mexico $694,300,000,000 98,550,000

Russia $692,000,000,000 146,860,000

Canada $658,000,000,000 30,680,000



2. What range of the unemployment rate would indicate that a fully employed economy? a. 4-6%b. 7-8%c. 10-12%d. 14-16%

a. 4-6%

1. Determine the unemployment rate based on the following information:Unemployed: 8.5 millionLabor Force: 190 million

8.5/190 = .0447 X 100 = 4.5%

Economics Daily Ten #21. Determine the CPI for 2010 based on the following information:Market Basket 2010: $3907.561982-1984 Market basket: $1792.00

2. Determine the inflation rate from 2009 to 2010 based on the following information:

CPI 2010 = 218.1CPI 2009 = 214.5

3907.56/1792 = 2.18056 x 100 = 218.1

218.1 – 214.5 = 3.63.6/214.5 = .0167 x 100 = 1.67%

Economics Daily Ten #21. Determine the unemployment rate based on the following information:Unemployed: 8.5 millionLabor Force: 190 million

2. Determine the CPI for 2010 based on the following information:Market Basket 2010: $3907.561982-1984 Market basket: $1792.00

3. Determine the inflation rate from 2009 to 2010 based on the following information:

CPI 2010 = use answer from aboveCPI 2009 = 214.5

3907.56/1792 = 2.18056 x 100 = 218.1

218.1 – 214.5 = 3.63.6/214.5 = .0167 x 100 = 1.67%

Economics Daily Ten #11. List the function that each of the following serves:

1. Money can earn interest in the bank.2. Money can buy things.3. Money is a way to keep track of debts/investments.

2. List the following in order from most liquid to least: House, car, checking account, savings account.

Store of Value

Medium of Exchange

Unit of Account

Checking account, savings account, car, house


2. When the Federal Reserve buys government securities (bonds) on the open market, what effect does this action have on the nation’s money supply?Money Supplya. increases b. falls c. stays the samed. decreases

1. Which of the following is responsible for the control of the money supply?a. the United States Treasuryb. the Federal Reserve Systemc. the Federal Deposit Insurance Corporationd. the Comptroller of the Currency

the Federal Reserve System

increases


2. The policy of the Fed to increase the money supply during a downturn in the economy reflectsa. tight-money policy b. center-money policy c. easy-money policyd. hard-money policy

1. The Federal Reserve System conducts its business directly witha. the government and banksb. stock marketsc. individuals and firmsd. product markets and factor markets

easy-money policy

a. the government and banks

A $3000 deposit is made in the bank and the RRR is 9%.1. How much must be held as required reserves?

2. How much will be available in excess reserves?

3. How much could the initial deposit increase the money supply?


3000 x .09 = $270

3000 – 270 = $2730

MM = 1/.09 = 11.11 3000 x 11.1 = $33,333.33

1. The BEST example of a progressive tax in the United States isa. the federal excise tax on gasolineb. the Social Security taxc. the federal personal income taxd. state sales taxes


2. Which of the following taxes is MOST regressive?a. the federal income taxb. a sales tax on foodc. a luxury taxd. the corporate income tax

1. If the federal government is attempting to encourage spending by consumers and businesses, a fiscal policy BEST serving this purpose would bea. decreasing taxesb. decreasing government spendingc. reducing the investment tax creditd. balancing the budget


2. Which of the following results when federal government expenditures are less than the federal government’s total revenue?a. a trade surplusb. a federal budget deficitc. a negative balance of paymentsd. a federal budget surplus

Economics Daily Ten #3• Use an aggregate demand and aggregate supply diagram to illustrate and explain how

each of the following will affect the equilibrium price level and real GDP:1. Consumers spending declines as a result of a recession2. Government spending increases3. Foreigners prefer Chinese products over U.S. products

PriceLevel

Quantity ofOutput

Equilibriumprice level

Aggregate supply (AS)

Aggregate demand (AD)

Equilibriumoutput

Economics Daily Ten #1China and the United States are considering trade of two products, Cars

and Cheese. The U.S. can produce 15 cars, while in China they can produce 4. In the U.S. they can produce 5 tons of cheese, while in China can only produce 2.

1. Who has absolute advantage in this situation?2. ________ has a comparative advantage when producing cars3. ________ has a comparative advantage when producing cheese.4. Therefore, ___________ should produce cars and __________ should produce

cheese.

Productivity

Cars Cheese

US = _____ cheese = ______ cars

China = _____ cheese = ______ cars

1/3 3

1/2 2

5/15 15/54/22/4

15 524

US China

US China

Explain: Absolute advantage exists when one country can produce better than another (lower financial cost). Comparative advantage is determined by lower opportunity cost.

US

Economics Daily Ten #2Japan and the Canada are considering trade of two products, CDs and

Beef. Japan can produce 4 cds, while in Canada they can also produce 4. In Japan they can produce 2 pounds of beef, while in Canada they can produce 6.

1. Who has absolute advantage in producing Cds? _________________2. ________ has a comparative advantage when producing cds3. ________ has a comparative advantage when producing beef.4. Therefore, ___________ should produce cds and __________ should produce

beef.

Productivity

CDS Pounds of Beef

Japan = _____ beef

= ______ cds

Canada = _____ beef

= ______ cds

2/4 4/24/66/4

4 264

Japan Canada

Japan Canada

Neither

1/2 or .5 2

3/2 or 1.5 2/3

- Why are all goods and services scarce? a. Some goods have a greater opportunity cost than others...

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