Unit 1 Test-Review Sheet

M/C-these are the concepts that will be covered:
shortage, guns and butter concept, production possibilities frontiers curve, examples of capital and trade-offs, incentives, thinking at the margin, entrepreneur, key economic questions, different types of economies-free market, command, traditional, economic goals, government economic policy-Social Security, etc.

Matching
efficiency, goods, trade-off, production possibilities graph, scarcity, services, shortage, opportunity cost, underutilization, labor, factors of production

Matching
production possibilities frontier, trade-offs, shortage, scarcity, growth

Matching
market failure, cash transfers, public policy, externality, welfare, public disclosure laws, business cycle, interest group, microeconomics, poverty threshold.

Short answer-interpreting a decision making grid, a circular flow diagram, and a table on federal programs

Essays-
-Explain how an economy can work efficiently in terms of its production possibilities but not be producing goods that are useful to it. 5 points
-What are some of the advantages of a mixed economy?
-Why have many of the governments of countries that had centrally planned economies begun to privatize their economies?
-What are the three main goals sought by policymakers in the economy?
- Compare. In the first paragraph, compare the advantages and disadvantages of both capitalism and socialism. In a second paragraph explain which system should be emphasized more in a nation’s economy-capitalism or socialism. Support your answer.