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Midterm Exam Review: Key Economic Concepts and Terms

This guide provides an overview of essential economic concepts that are crucial for successfully preparing for the mid-term exam. Key topics include production possibilities curves, centrally planned economies, market demand schedules, elasticity of demand and supply, and the law of supply. Understanding these terms will aid in grasping how economies operate, the role of competition, and the effects of governmental policies. Students are encouraged to reflect on their study strategies and engage in active review to solidify their understanding.

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Midterm Exam Review: Key Economic Concepts and Terms

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  1. 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?

  2. Key Terms and Ideas • Why would a production possibilities curve move down and to the left?

  3. Key Terms and Ideas • What would cause it to move to the right?

  4. 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.

  5. 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.

  6. 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.

  7. THEIR DEMAND FOR MILK IS WHAT? THEIR DEMAND FOR ICE CREAM IS WHAT?

  8. 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.

  9. 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.

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