Date: January 19, 2012Topic: review – day 2 of 3Aim: How can we successfully review for our mid-term exam?Do Now: when is our mid-term? What should we do when we are done early?
Key Terms and Ideas • Why would a production possibilities curve move down and to the left?
Key Terms and Ideas • What would cause it to move to the right?
Key Terms and Ideas • Centrally Planned Economies. • Competition. • Specialization makes an economy efficient. • Chinese economy is mixed but on the side of the centrally planned.
Key Terms and Ideas • Free Market – encourage growth. • Adam Smith. • Traditional Economy. • Competition - regulating force in the market and wide variety of goods. • Centrally planned economy – gov’t might motivate workers through posters or fliers. • Market Demand Schedule will show quantities demanded at each price of all consumers in a market. • Baby Boom and Demand.
Key Terms and Ideas • Elastic/Inelastic Demand – whether you react or not to a price change. • Inelastic demand – you will continue to buy the product regardless of the price change. • Elastic demand – you are reacting to it so you won’t. • Demand Schedule – lists how much a person will buy at different prices. • Law of Demand – lower the price – people will buy more of it. • Inferior Good – a increase in income will cause your demand for certain goods to fall (generics). • Goods for sale now but the price increase later – store the goods until the prices rise.
THEIR DEMAND FOR MILK IS WHAT? THEIR DEMAND FOR ICE CREAM IS WHAT?
Key Terms and Ideas • Law of Supply – produce more when the price goes up (think like a producer). • Elasticity of Supply – changing the supply of a product. • Inelastic supply – agricultural goods are difficult to change supply. • Passenger airplanes – a small increase in price will have a big impact on supply. Rugs, plums, and sandwiches have more of an inelastic supply.
Key Terms and Ideas • Monopolistic Competition – companies selling similar but not identical products. • Non-price competition. • Patents – a company can profit without worrying about competition. • Internet has reduced start up costs. • Natural monopolies. • Antitrust laws protect against monopolies. • Microsoft has not been forced to split up entirely. At and t has as well as standard oil.