TEACHER'S KEY Economics: Principles and Practices A One ...€¦ · Book: Damn Lies and Statistics,...

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TEACHER'S KEY By: Janelle Martinez, Art Price, Cheryl Siu, and April Todd 2016

NOTE: Text in RED must be modified in the student packets to your specifications:

Economics: Principles and Practices A One Semester Course

Teacher: _____________ EMAIL: _____________________PHONE: _________________

Materials Needed: Textbook: Economics: Principles and Practices Book: Damn Lies and Statistics, by Joel Best Internet access Study partner or group (optional)

HPCS 12th grade students are required to study economics. This course meets that requirement. In all of the course work that you have completed in high school, none will have a greater impact on your

future than Economics. The concepts that you will be studying here will affect you every day for the rest of your life! Why? Because economics has to do with money - and like it or not, our society is built around money. No matter what career you end up in, you will be faced with paying bills, buying essentials such as food and shelter, paying taxes, and earning enough to do all of that and still accomplish what you want with your life. The information in this course is vital to your future.

In this course you will be answering the fundamental questions – “What is Economics? And what does it

have to do with me?” You will be asked to relate that question into the 4 units:

1. What is Economics and how does it affect me?

2. How does Economics work?

3. How does Economics affect my country?

4. How does Economics affect the world?

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By the end of this course you will:

12.1 Students understand common economic terms and concepts and economic reasoning. a. Examine the causal relationship between scarcity and the need for choices. b. Explain opportunity cost and marginal benefit and marginal cost. c. Identify the difference between monetary and nonmonetary incentives and how changes in incentives cause changes in behavior. d. Evaluate the role of private property as an incentive in conserving and improving scarce resources, including renewable and nonrenewable natural resources. e. Analyze the role of a market economy in establishing and preserving political and personal liberty (e.g., through the works of Adam Smith). 12.2 Students analyze the elements of America's market economy in a global setting. a. Understand the relationship of the concept of incentives to the law of supply and the relationship of the concept of incentives and substitutes to the law of demand. b. Discuss the effects of changes in supply and/ or demand on the relative scarcity, price, and quantity of particular products. c. Explain the roles of property rights, competition, and profit in a market economy. d. Explain how prices reflect the relative scarcity of goods and services and perform the allocative function in a market economy. e. Understand the process by which competition among buyers and sellers determines a market price. f. Describe the effect of price controls on buyers and sellers. g. Analyze how domestic and international competition in a market economy affects goods and services produced and the quality, quantity, and price of those products. h. Explain the role of profit as the incentive to entrepreneurs in a market economy. i. Describe the functions of the financial markets. j Discuss the economic principles that guide the location of agricultural production and industry and the spatial distribution of transportation and retail facilities. 12.3 Students analyze the influence of the federal government on the American economy. a. Understand how the role of government in a market economy often includes providing for national defense, addressing environmental concerns, defining and enforcing property rights, attempting to make markets more

competitive, and protecting consumers' rights. b. Identify the factors that may cause the costs of government actions to outweigh the benefits. c. Describe the aims of government fiscal policies (taxation, borrowing, spending) and their influence on production, employment, and price levels. d. Understand the aims and tools of monetary policy and their influence on economic activity (e.g., the Federal Reserve). 12.4 Students analyze the elements of the U.S. labor market in a global setting. a. Understand the operations of the labor market, including the circumstances surrounding the establishment of principal American labor unions, procedures that unions use to gain benefits for their members, the effects of

unionization, the mini-mum wage, and unemployment insurance. b. Describe the current economy and labor market, including the types of goods and services produced, the types of skills workers need, the effects of rapid technological change, and the impact of international competition. c. Discuss wage differences among jobs and professions, using the laws of demand and supply and the concept of productivity. d. Explain the effects of international mobility of capital and labor on the U.S. economy. 12.5 Students analyze the aggregate economic behavior of the U.S. economy. a. Distinguish between nominal and real data. b. Define, calculate, and explain the significance of an unemployment rate, the number of new jobs created monthly, an inflation or deflation rate, and a rate of economic growth. c. Distinguish between short-term and long-term interest rates and explain their relative significance. 12.6 Students analyze issues of international trade and explain how the U.S. economy affects, and is affected by, economic forces beyond the United States's borders. a. Identify the gains in consumption and production efficiency from trade, with emphasis on the main products and changing geographic patterns of twentieth-century trade among countries in the Western Hemisphere. b. Compare the reasons for and the effects of trade restrictions during the Great Depression compared with present-day arguments among labor, business, and political leaders over the effects of free trade on the economic and

social interests of various groups of Americans. c. Understand the changing role of international political borders and territorial sovereignty in a global economy. d. Explain foreign exchange, the manner in which exchange rates are determined, and the effects of the dollar's gaining (or losing) value relative to other currencies.

This is a 5 credit one semester College Prep independent study course with a test after each unit. Your

teacher may simplify this course, but then you will receive 5 credits of Non-CP Economics. You will complete the majority of the assignments set out in the pacing guide on your own, at home. Your teacher may elect to complete some assignments with you individually, or as a group. Any group collaboration must be approved by your teacher ahead of time. Self-check quizzes may be completed at home, but all tests must be completed at school with your teacher, or in the computer lab. You will be expected to be able to discuss the topics you learned the previous week with your teacher during your meeting. These discussions may be counted as oral quizzes.

All work must be your own. You may not copy anyone else, or copy from the book without citing your source. You must reference all answers with the page number on which you found it. Cheating and/or plagiarism will result in a 0% on the assignment and a warning letter. More than one instance may result in withdrawal from the school.

All papers must be typed, 12pt. font, in MLA format. A Work’s Cited page, and an outline is required.

Grades will be updated in PowerSchool at least once per month, (the goal is weekly, but let’s be realistic!) Grades for this course will be calculated as follows:

Weekly homework: 30% Major projects: 20%

Quizzes: 15% Tests: 35%

Let’s learn economics, so we understand how it will affect us today and in the future!

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SUGGESTIONS FOR TEACHER/STUDENT MEETINGS

This is a guide for independent study teachers in CP Economics (non-CP modifications are indicated in the pacing guide). It is highly recommended that the students meet in groups of two or three with their teachers for the maximum discussion potential. The following are suggestions for teachers to use in their weekly student meetings, and should take no more than 20 minutes – not counting administering assessments. Any teacher implementing this course in a classroom setting will, no doubt, want to expand on this and perhaps incorporate some of the weekly student’s assignments as group activities.

Beginning of Week One:

Pass out all materials – Student textbooks, syllabus and spiral Discuss the Essential Question: Explain this Week’s assignments

Beginning of Week Two:

Students turn assignment sheet and homework from week 1 labeled with EACH assignment number

Discuss student’s understanding of the Economics Unit 1 Essential Question

Discuss what students learned this week

Review Life Project progress and give feedback

Mini quiz (Illuminate or oral) to prep for Unit Test

Explain Week 2’s assignments

Beginning of Week Three:

Students turn assignment sheet and homework from week 2 labeled with EACH assignment number

Discuss student’s understanding of the Economics Unit 1 Essential Question

Discuss what students learned this week

Review Life Project progress and give feedback

Mini quiz (Illuminate or oral) to prep for Unit Test

Explain Week 3’s assignments

Etc.....................(Note: Testing weeks will require the student to schedule extra time to take the test in addition to this meeting – maybe even another day, or in the computer lab, etc.

STUDY BLUE

To access and learn to use STUDY BLUE for student quizzes and vocabulary go to:

https://www.studyblue.com/notes/note/n/directions/file/1635165

Economics Unit 1 Test Name _____________________________

Matching (1 point each) 1. ___ Bond

2. ___ Capital

3. ___ Consumer Sovereignty

4. ___ Cooperative

5. ___ Corporation

6. ___ Economic systems

7. ___ Inflation

8. ___ Labor

9. ___ Labor union

10. ___ Money

11. ___ Opportunity cost

12. ___ Productivity

13. ___ Stock

14. ___ Trade off

15. ___ Want

a) Works to help its member’s interests concerning pay, hours, etc.

b) Who rules the market when determining goods/services produced

c) Rise in general level of prices

d) People with skills and efforts

e) Organized way society provides for the wants/needs of the people

f) Non‐profit business which produces for the benefit of its members

g) Equipment, and money used in the production of goods

h) Degree to which resources are used efficiently

i) Cost of the next best alternative use of money, time, or resources

j) Contract to repay borrowed money, with interest, in the future

k) Certificate of partial ownership in a corporation

l) An organization with the legal rights/responsibilities of a person

m) Alternatives that are given up when one is chosen over another

n) A way of expressing or communicating a need

o) A medium of exchange, or a measure of value

Multiple Choice (1 point each) 16. Increased competition, higher profits, more and better‐paying jobs, and healthy tax revenues are all

benefits of successful a. Entrepreneurship

b. Central planning

c. Labor unions

d. Mergers

17. Three of the following are essentially the same. Which one does not belong: a. Capitalism

b. Market economy

c. Free enterprise

d. Traditional economy

18. When corporations involved in different steps of manufacturing or marketing merge, it is known as a(n) a. Multinational merger

b. Vertical merger

c. Horizontal merger

d. Conglomerate

19. Choose the one that is not an Economic Institution a. Schools b. Households and families

c. Labor unions d. Corporations

20. A good that lasts for less than 3 years is considered: a. Durable b. Non‐durable

c. Expensive d. Scarce

21. A factor that motivates and influences human behavior

a. Incentive b. Supply

c. Demand d. Trade‐off

22. The idea that decisions or events in one part of the world or in one sector of the economy affect the

other parts of the worlds or sectors of the economy: a. Interdependence b. Cooperation

c. Fiscal policies d. Distribution

23. Public utilities are businesses that

a. Are government owned b. Usually have no competition

c. Distribute natural resources d. Are unregulated

Short Answer (2 points each) List the four factors of production:

24. _______________________________ 25. ____________________________

26.____________________________________27. ________________________________________

28. An ____________________________________ is someone who starts a business.

29. A __________________________________ is a business enterprise owned by two or more persons.

30. The trading for a good or service, or for money in a voluntary transaction between the buyer and the seller is known as an ____________________________________________ 31. A __________________________________ is a business enterprise owned by one person.

Graphs

Study the graph and answer the questions below:

32. (1 point) How many bankruptcy cases does each horizontal grid line represent?

33. (2 points) In what year were the fewest bankruptcy cases filed? How many were filed?

34. (1 point) About how many more bankruptcies were filed in 2000 than in 1995?

35. (3 points) Define bankruptcy:

_____________________________________________________________________________________

_____________________________________________________________________________________

Essay (5 points each) 36. Why is the United States said to have a mixed economy rather than a pure free enterprise or capitalist economy?

37. Explain the relationship between scarcity and choice.

38. What are the differences between Market Economy, Traditional Economy and Command Economy?

39. Why is there no such thing as a “free lunch?”


Matching (1 point each)1. ___ equilibrium price

2. ___ demand

3. ___ income effect

4. ___ variable cost

5. ___ externality

6. ___ diminishing marginal utility

7. ___ price ceiling

8. ___ production function

9. ___ monopolistic competition

10. ___ oligopoly

11. ___ monopoly

12. ___ microeconomics

13. ___ elasticity

14. ___ inelastic demand

15. ___ supply

16. ___ role of government

a) changes in costs that occur when output

increases/decreases

b) decline in satisfaction received by using more of a

product

c) relationship between changes in output to different

amounts of single input when other inputs do not change

d) market structure like perfect competition but which

allows for product differentiation

e) ability, willingness, and desire to buy a product

f) market dominated by a few large firms

g) price that leaves neither a surplus nor a shortage

h) change in demand due to a change in price of a product

i) effect that an economic activity has on a third party

j) highest price that can legally be charged for a product

k) behavior and decisions of individuals or small businesses

l) a cause and effect relationship reflected in price

m) change in price will not affect quantity demanded

n) amount of a product offered for sale at any price

o) establish law and order for economic functions

p) market structure with only one producer

Multiple Choice (1 point each) 17. All of the following are examples of market failure EXCEPT:

a. Rising insurance costs due to uninsured motorists

b. Deforestation caused by acid rain

c. Over‐crowded highways d. Inferior fabrics used in manufacturing

costumes

18. Costs for electricity, natural gas, and labor are examples of a. Fixed costs b. Variable costs

c. Marginal costs d. Overhead

19. An example of resource immobility is

a. A delay in the delivery of overnight deliveries

b. Building an office park at a former military base

c. An employee leaving town for a higher‐paying job

d. A dam located at the mouth of a river that’s run dry

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20. Market failure can occur when a. Adequate competition exists in all

markets b. Buyers and sellers are well informed

c. Resources do not move from industry to industry

d. Prices reflect the costs of production 21. The Robison‐Patman Act

a. Increased consumer protection from price discrimination

b. Established the FDA

c. Outlawed restraints and monopolies that hindered trade

d. Nationalized the railroads

22. Which one is an example of an elastic demand a. Vegetables such as green beans b. Salt

c. Medicine d. Gasoline

23. Which one is not a factor that could cause a change in supply:

a. Government regulations b. Number of sellers

c. Technology d. Supply schedule

24. All of the following are reasons for Market Failures except:

a. Inadequate competition b. Lack of access to reliable information

c. Resource immobility d. Unemployment

25. Market structure includes all of the following except:

a. Competition b. The number of buyers and seller

c. The nature of the product d. The extent of control over price

Short Answer (2 points each)

26. _________________________________ refers to the way the nation’s income is distributed by

function – to those who provide productive resources‐ and by recipient, primarily individuals and

families.

27. Competition depends on ________________________________.

28. _________________________________ are the arrangements that enable buyers and sellers to

exchange goods and services.

29. The amount of money that people pay for a unit of a particular good or service is a

__________________________________.

30. An ____________________________________ is someone who starts a business.

11

31. Prices help decide the three basic _______________________, 32.___________________________,

33.___________________________ questions that all societies face.

Graphs


34. (1 point) What does curve B show?

35. (1 points) What is the equilibrium price?

36. (2 point) How would the graph change in appearance if supply suddenly decreased?

12

Essay (5 points each) – please use the back or another paper if needed 37. What is the role of prices in a market economy? What are the advantages of prices?

38. Imagine that you are going into business for yourself. What are the practical applications of cost principles that must be applied if the business is to be profitable?

39. Define and explain the relationship between Supply and Demand.

40. How does Economics affect you? List three ways and explain the affect in detail.

13


Matching (1 point each)1. ___ monetize the debt

2. ___ national income accounting

3. ___ depression scrip

4. ___ population pyramid

5. ___ real GDP

6. ___ fractional reserve system

7. ___ welfare

8. ___ unemployment

9. ___ recession

10. ___ monetary policy

11. ___ inflation

12. ___ deflation

13. ___ aggregate supply

14. ___aggregate demand

15. ___standard of living

a) Actions by the Federal Reserve to expand or contract the

money supply to affect the cost and availability of credit

b) Bar graph showing population by age and gender

c) Creating extra money to offset deficit spending

d) Currency printed by towns during the Great Depression

e) Decline in real GDP lasting at least two quarters or more

f) Decrease in the general level of prices of goods and

services

g) Programs that provide general economic and social

assistance to needy individuals

h) Quality of life based on ownership of necessities and

luxuries that make life easier

i) Requires that banks keep part of deposits as legal

reserves

j) Rise in the general level of prices of goods and services

k) System for recording production consumption, savings, and investment statistics in order to track economic health

l) Total dollar value of all final goods and services produced

in a country, adjusted for inflation

m) Total quantity of goods and services demanded at

different price levels.

n) Total value of goods and services that would be produced

in a specific period of time at various price levels

o) Working less than 1 hour/week, yet trying to find a job

Multiple Choice (1 point each)

16. A condition of acute shortages, high unemployment, and excess capacity at manufacturing facilities

is a: a. Expansion b. Depression

c. Trough d. GDP

17. A Fiscal policy consists of changes in:

a. Taxes b. Government expenditures on goods

and services

c. Transfer payments designed to affect aggregate demand

d. All of the above

14

18. The foreign sector of the economy represents the a. Total dollar value of all exports b. The sum of all imports and exports

c. Total dollar value of all imports d. Difference between the dollar value of

all imports 19. The business cycle since WW2 has been characterized by

a. Extended expansions alternating with brief recessions

b. Brief expansions alternating with lengthy recessions

c. Uninterrupted expansion d. Uninterrupted recession

20. The 40% of the population with the lowest income controls

a. Less than 2% of the nation’s wealth b. About 10% of the nation’s wealth

c. Nearly 20% of the nation’s wealth d. About 40% of the nation’s wealth

Short Answer (2 points each) Identify and define five types of unemployment:

21. _____________________ _________________________________________________

22. _____________________ _________________________________________________

23. _____________________ _________________________________________________

24. _____________________ _________________________________________________

25. _____________________ _________________________________________________

Identify the five causes of inflation

26. ______________________________________________________________________

27. ______________________________________________________________________

28. ______________________________________________________________________

29. ______________________________________________________________________

30. ______________________________________________________________________

31. _________________________________ is that part of economic theory that deals with the

economy as a whole and decision making of large units such as governments and unions.

15

Graphs

Study the chart and answer the questions below:

Persons Below Poverty Level (in millions)

Year All Races White Black Hispanic Average income cutoffs for family of 4 at poverty level

1990 33.6 22.3 9.8 6.0 $13,359

1995 36.4 24.4 9.9 8.6 $15,569

1999 32.3 21.9 8.4 7.4 $17,029 Source: Bureau of the Census, U.S. Dept. of Commerce, 2002

32. (1 point) Did the total number of people below poverty level increase or decrease from 1990‐1999?

33. (1 points) What was the total number of persons below the poverty level in 1999?

34. (1 point) What was the poverty level for a family of four in 1990?

Essay (5 points each) – please use the back or another paper if needed 35. What are the poverty guidelines and how are they used by the federal government?

36. What are the purposes of monetary and fiscal policies? 37. Who determines monetary policies for the American economy? What methods of regulation might be used to increase the money supply?

16


Matching (1 point each)1. ___ zero population growth

2. ___ imports

3. ___ Great Leap Forward

4. ___ acid rain

5. ___ collateral

6. ___ tariff

7. ___ free‐trade area

8. ___ foreign exchange rate

9. ___ keiretsu

10. ___ nonrenewable resources

a) Loan guarantee consisting of property or other security

b) Natural resources that cannot be replaced

c) Tax on imported goods

d) Births equal deaths

e) Price of one country’s currency in another country’s

currency

f) Group of Japanese firms collaborating to avoid

competition

g) Five year plan in which China planned to convert to pure

communism

h) Precipitation that carries pollution

i) Products that are brought into a country

j) Agreement between countries to reduce the trade

barriers among themselves

Multiple Choice (1 point each)

11. Protectionists cite all of the following reasons to justify high tariffs EXCEPT

a. Protecting infant industries b. Promoting GATT

c. Protection domestic jobs d. Helping the balance of payments

12. Efforts to bring privatization to the Soviet Union began with

a. Boris Yeltsin b. Mikhail Gorbachev

c. Joseph Stalin d. Vladimir Lenin

13. The nation once known as the “socialist state that works” is

a. Singapore b. Norway

c. Japan d. Sweden

14. When a developing country is in the stage of semi‐development a. It is industrially developed b. It is at an economic point of takeoff

c. It has no formal economic organization d. Its income is growing faster than its

population 15. Today the American economy is an example of

a. Pure capitalism b. Socialism

c. Modified free enterprise d. Laissez‐Faire capitalism

17

Multiple Choice (2 points each)

Each question will have more than one answer.

16. Ms. Widget Producer sold 1,500,000 widgets in July at $10.00 per widget. In August she raised the

price of widgets to $15.00 each in hopes of increasing company profits. What is likely to happen to

widget sales in August?

a. More widgets will be sold in August than in July.

b. The number of widgets sold in August will fall.

c. Ms. Widget Producer will hire more workers to keep up with the demand for more widgets.

d. Ms. Widget Producer may consider lowering the price of widgets in September.

17. A number of studies show that Congress spent more money than it raised through tax increases

between 1950 and 1990. At times Congress spent as much as $1.50 for each $1.00 raised by a tax

increase. What are some likely results of this “tax and spend” policy?

a. These tax increases are not keeping the federal budget deficit under control.

b. Consumers had more money for personal spending.

c. The federal budget was smaller during tax increase years.

d. Workers discovered increased wages did not always mean they were better off financially

18. Jenny is 16 years old and has just applied for her first job. If she is hired, Jenny will work after school

and on weekends. Jenny was delighted to learn the minimum wage had just been increased. What

are some probable results of an increase in the minimum hourly wage?

a. There will be more jobs for teenagers

b. Everyone earning more than minimum wage will get a raise equal to the wage increase

c. Employers may be less willing to hire untrained workers since they must now pay them more.

d. Each minimum wage employee will now pay more into social security for each hour worked.

19. The United States balance between exports and foreign imports shows a negative balance. The

value of goods and services imported is billions of dollars more than the value of similar exports.

Which of the following are likely to have contributed to this negative foreign trade balance?

a. China exported more products to the United States than it imported from the United States.

b. The United States continued to import millions of barrels of oil each day.

c. GATT policies limit certain tariffs charged by some nations.

d. Japan sold more autos and video equipment to the U.S. than it bought from the U.S.

20. The Federal Reserve Board raises interest rates in order to “cool” the economy and slow inflation.

The Board lowers interest rates in order to stimulate or improve a poor or slow economy. Which

economic events might cause the Federal Reserve Board to raise interest rates?

a. Both Ford and GM report record sales of new autos and announce price increases

b. AFL‐CIO unions have won six major strikes and gained wage increases of 10% for their workers.

c. Congress has just raised income taxes again.

d. Four major companies have closed their U.S. plants and moved operations to Mexico.

18

Short Answer (2 points each) List the five steps to economic decision making that have been recommended by the National Council on Economic Education.

21. ___________________________________________________________________________

22. ___________________________________________________________________________

23. ___________________________________________________________________________

24. ___________________________________________________________________________

25. ___________________________________________________________________________

List four Barriers to Trade.

26. ___________________________________________________________________________

27. ___________________________________________________________________________

28. ___________________________________________________________________________

29. ___________________________________________________________________________

True or False (1 point each)

30. _____ Subsistence is the state in which the population produces barely enough to support itself.

31. _____ The U.S. has a modified free enterprise system, which has been altered by the people to meet

its goals.

32. _____ The least developed stage in economic development is called primitive equilibrium.

33. _____ Many nations of Eastern Europe had a flourishing black market, where entrepreneurs and

merchants sold goods illegally.

34. _____ A trade deficit is a deficit in the “goods” component of the balance of payments.

35. _____ When external debt becomes too large, countries have difficulty paying the interest.

19

Graphs


Major United States Trading Partners, 2000

(units = millions of dollars)

Source: U.S. Department of Commerce, U.S. Foreign Trade Highlights

36. (1 point) About how much did the United States import from China in 2000?

37. (2 points) To what country did the United States export the most goods in 2000? What was the

value of the goods?

38. (3 points) For what country did the value of exports and imports most nearly balance? Which was

greater, imports or exports? What was the approximate difference?

0 50 100 150 200 250

Canada

Mexico

Japan

United Kingdom

China

Imports Exports

20

Essay (5 points each) – please use the back or another paper if needed 39. What is a trade deficit and how does it create problems for the American economy?

40. What are the significant challenges that global economics faces today?

41. Explain why international aspects of growth and stability are more important today than in the past.

Bonus Question: What two words sum up the basics of Economics?

______________________________ and _____________________________

PCI 6_2016 21

UNIT 1 Answer Key

PreTest

Unit 1 Test (66 POINTS)

1. J

2. G

3. B

4. F

5. L

6. E

7. C

8. D

9. A

10. O

11. I

12. H

13. K

14. M

15. N

16. A

17. D

18. C

19. A

20. B

21. A

22. A

23. C

(24‐27 Can be in any order)

24. labor,

25. land,

26. capital,

27. entrepreneur

28. entrepreneur

29. partnership

30. voluntary exchange

31. sole proprietorship

32. 100,000

33. 1994; 850,000

34. 400,000 more

(35‐39 should be in students own

words)

35. Court granted permission to individuals

or businesses to cease or delay

payments on some or all debt for a

specified time

36. Because the U.S. government, with

subsidies and laws, regulates businesses

37. Scarcity of goods and capital requires

people to make choices about the

goods and services they purchase or

use

38. Market – free enterprise

Traditional – economy based on ritual,

habit, or custom

Command – central authorities

(government) makes economic

decisions

39. It’s always paid for by someone. Even if

you grow it yourself in your backyard,

your time has value.

PCI 6_2016 22

UNIT 2 Answer Key (65 points)

1. G

2. E

3. H

4. A

5. I

6. B

7. J

8. C

9. D

10. F

11. P

12. K

13. L

14. M

15. N

16. O

17. D

18. B

19. D

20. C

21. A

22. A

23. D

24. D

25. A

26. Income distribution

27. Market structure

28. Markets

29. Prices

30. Entrepreneur

31. What *

32. How*

33. For whom *

*may be in any order

34. Demand

35. $1.75

36. Curve A would shift to the left, the

equilibrium price would increase and

quantity supplied would decrease

37. Prices are the link between producers

and consumers. They help decide

WHAT, HOW, and FOR WHOM goods

are produced. The advantages of prices

include: they are neutral, flexible,

provide for freedom of choice,

competitive markets find their own

prices without outside forces or

government involvement

38. Answers will vary, but students should

note that a successful business has to

consider both fixed and variable costs.

39. Supply is defined as the different

quantities of a resource, good, or

service that will be offered for sale at

various possible prices during a specific

time period.

Demand is defined as the different

quantities of a resource, good or service

that will be purchased at various

possible prices during a specific time

period.

If supply is less, demand will increase, if

demand is more, supply will increase.

40. Answers will vary, but details must be

included.

PCI 6_2016 23

UNIT 3 Answer Key (60 points)

1. C

2. K

3. D

4. B

5. L

6. I

7. G

8. O

9. E

10. A

11. J

12. F

13. N

14. M

15. H

16. B

17. D

18. A

19. A

20. A

5 types of unemployment (in any

order)

21. Frictional – you choose to be

unemployed – maybe while you wait for

a new job to start

22. Structural – caused by changes in

consumer desires – different demands

for worker skills

23. Cyclical – swings in economic cycles –

like a recession

24. Seasonal – based on weather or time of

year – like pool maintenance or

construction

25. Technological – workers have been

replaced by machines

5 causes of inflation (in any order)

26. Demand/pull – shortages lead to prices

increasing

27. Federal deficit spending – government

debt leads to inflation

28. Rising labor costs – could lead to a

spiral of wages /price increases

29. Unexpected increases in other

overhead prices – for example oil

shortages cause gas to increase which

cause trucking/shipping costs to

increase which leads to food prices

increasing

30. Growth of the money supply – more

money means it is worth less

31. Macroeconomics

32. Decrease

33. 32.3 million

34. $13,359

35. Annual money limits used to evaluate

the income that families receive. Used

to determine the amount of money or

benefits they are eligible for.

36. Monetary policies involve interest rates

and the total supply of money. Fiscal

policies cover taxes and government

spending. These policies are created to

stimulate the economy and monitor

taxation.

37. The Federal Reserve System. They

could: buy government securities to

increase excess reserves so banks will

lend more money, OR they could lower

the discount rate or the bank reserve

requirement.

PCI 6_2016 24

UNIT 4 Answer key Economics

1. I 2. G 3. H 4. A 5. C 6. J 7. E 8. F 9. B

10. B 11. B 12. D 13. D 14. C

15. B,D 16. A,D 17. C,D 18. A,B,D 19. A,B

20. State the problem or issue 21. Determine the personal or social goal to be

attained 22. Consider the principal alternative means of

achieving the goal 23. Select economic concepts to understand

problems and appraise the merits of each alternative

24. Decide which alternative best leads to the attainment of the goals May be in any order:

25. Tariffs 26. Quotas 27. Import licenses 28. Cartels

29. T 30. T 31. T 32. T 33. T 34. T

35. About $100 million 36. Canada, about $175 million 37. United Kingdom, imports, about 1 million

38. A trade deficit means that a nation imports

more than it exports. This imbalance of trade leads to an imbalance of payments, which weakens the dollar, which means that imports become more expensive for Americans, and U.S. goods become more expensive for foreigners. The result is a shift in employment as import industries have to lay off workers..

39. Students answers will vary but should include at least two of the following:

Energy and environmental security

Conflict

Competing in a new era of globalization

Global imbalances

Rise of new powers

Economic exclusion in the middle east

Global corporations = global impact

Global health crisis

Global governance stalemate

Global poverty and new approaches

40. International aspects of growth and stability are more important today than in the past because all nations are much more interdependent.

TEACHER'S KEY Economics: Principles and Practices A One ...€¦ · Book: Damn Lies and Statistics,...

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