Professional Documents
Culture Documents
When supply increases, demand decreases (this is because producers want to supply more of
things of a high price and consumers don’t want things that are high prices)
4. Describe how prices are set in terms of scarcity.
7. Describe what happens when demand for something suddenly increases because of a trend.
The price goes up and demand increases which decreases supply. To sell more things of the
higher price, the producers will supply more which equalizes the price. Then when the demand
decreases the price will go down and the supply with stay the same. Soon enough the supply will
go back down and equalize price.
1. Write down the key terms that match the following definitions.
a. production : The creation of goods and services to satisfy wants and needs.
b. allocation : Setting aside resources for a specific purpose.
c. opportunity cost : The benefits of the best alternative option that are given up by a
particular decision.
d. efficiency : Producing something with as little waste as possible.
e. optimal : Most favorable or desirable.
2. List the three factors of production that are used as inputs for making goods and services.
The government can make a choice that is satisfying to them but not to everyone else which
makes them mad. Everyone’s needs need to be equal. It also risks being unproductive.
Fungible gas
Public parade
Since it’s free, producers don’t want to produce it but people still demand it & they can’t
efficiently handle it
ANYTHING THAT HAS A PRICE IS SCARCE
LAND LABOR AND CAPITAL ARE SCARCE
1. Write down the key terms that match the following definitions.
a. commodity : Something useful that can be bought and sold. Has a supply and demand that
affects its price
b. wage : Amount received by workers for their labor.
c. labor market : Area of the economy in which jobs are offered and accepted.
d. reserve wage : The lowest amount a worker will accept for a job.
e. workforce : Collective term for the people who work at jobs.
f. labor pool : Workers available for jobs.
g. immigration : The movement of people from one country to another.
2. List the factors that influence the price of labor.
a. culture
b. education levels
c. international competition
d. historical changes
e. technological changes
f. supply and demand
Sending jobs to places where people are willing to work for less, people lose their jobs
(unemployment increase)
Makes them equal to the employer since the employer can’t afford to lose everybody
4. Describe how industrial actions influence employers and what employers can do in response.
Strike: No one is working so no revenue because nothing is being made, they can hire
strikebreakers
5. Describe the effects of the National Labor Relations Act (NLRA) and the Taft-Hartley Act on
employers and employees.
NLRA- legalized striking, prevented employers from firing employees in unions, investigated
abuses by employers
Taft- unions must give 60 days notice of strike, outlawed some industrial action
1. Write down the key terms that match the following definitions.
a. house market : Where houses and apartments are offered and purchased or rented.
b. owner-occupied : When the person who lives in the housing unit also owns it.
c. renter-occupied : When the person who lives in the housing unit pays the owner rent to
live there.
d. landlord : Owner of a property who rents it to those who live there.
e. cooperative : A housing type where the owners are the shareholders in a corporation that
owns the building.
f. single-family home : A house not attached to any other houses, intended to shelter one
household.
g. apartment building : Renter-occupied units in a building owned by a landlord.
h. town house : A house attached to other houses, generally in a long row.
i. condominium : A structure of two or more units that are individually owned, and
common parts of the property are owned jointly by the unit owners.
j. rent : To pay money for the right to live somewhere.
k. investment : Purchase of an asset with the intention of making a profit.
l. demographic : The distribution of different groups in a population based on such factors as
age, income, profession, etc.
m. mortgage : A loan given to pay for a house or other type of real estate.
n. mortgage interest rate : The amount of interest charged on a loan used to buy a house.
o. priced out : When a price becomes too high to be affordable.
2. List the advantages and disadvantages of renting a place to live.
Advantages:
cheaper
Disadvantages:
don’t own it, can’t get money back because you never owned it, reduced freedom
Disadvantages:
Housing is inelastic because it is expensive and takes a while to make. Takes a long time for the
supply of housing to increase when demand increases. Prices change a lot.
They’re repaid over a long time so different interests have big impact because it changes how
much someone pays each month.
Sellers- when buyers compete with each other, sellers can afford to wait for best offer
Buyers- sellers compete for a limited number of buyers, buyers wait for best price
Demand increase – prices goes up – encourages people to build more – price too high and rent –
demand decrease – price goes down
1. Write down the key terms that match the following definitions.
a. population density : Average number of people living in a particular space.
b. urban : Located in a city; a densely populated area.
c. rural : Located in the country; a sparsely populated area.
d. median home price : Midpoint price level; half the homes cost more, half the homes cost
less.
e. Suburbs : Primarily residential areas outside of but near a major city.
f. Exurbs : Primarily residential areas far from major cities.
g. zoning laws : Regulations defining how land in certain areas may be utilized.
h. urban renewal : The revitalization of an old and undesirable area of a city.
2. Describe how population density influences the law of supply and demand in the housing
market.
Lots of people, less space & higher demand. Less people, more space & lower demand.
Advantages:
More jobs, higher paying jobs, culture, places to go, larger social group
Disadvantages:
Advantages:
Less crime and pollution, privacy, close to outdoor activities
Disadvantages:
Less jobs, not near anything
5. If you had the choice, would you prefer to live in an urban or a rural area?
Urban
Automobiles made it possible to live farther from city but get the benefits
8. Describe the causes and effects of urban renewal.
Easier to do one thing well than many things. Eliminates wasted energy to get good at all things.
Enhances efficiency bc it allows resources and factors of production to go from one place to
another where they’re most needed
It can get them to diversify goods bc they can get things they didn’t have originally
Less jobs,
Tariffs make imports expensive so they don’t want to trade, subsidies make local things cheaper
1. Write down the key terms that match the following definitions.
a. business cycle : Regular changes in economic activity.
b. inflation : Rising prices for goods and services.
c. demand-pull inflation : A rise in prices driven by rising consumer demand.
d. cost-push inflation : A rise in prices driven by rising production costs.
e. boom : A period of high employment and rising demand.
f. recession : A general slowdown in economic activity.
g. depression : A period of decreasing economic activity, falling prices, and high
unemployment.
h. exogenous : Something external to a system.
i. monetary policy : The regulation of the money supply through various tools of government
action.
j. fiscal policy : The taxation and spending practices of the government.
k. budget deficit : When income is less than expenditures. DEMAND INCREASE
l. budget surplus : When expenditures are less than income. DEMAND DECREASE
2. Describe how inflation takes place.
As time passes, things get more expensive at different rates
5. List the phases of the business cycle and describe how the cycle moves forward.
Boom (demand, inflation, GDP increase, unemployment decrease) – recession (GDP, demand
decrease, unemployment & inflation high) – possible depression – recovery
6. Describe how monetary policy can be used to control the business cycle.
7. Describe how fiscal policy can be used to control the business cycle.
1. Write down the key terms that match the following definitions.:
a. wholesale : Sales to other companies rather than to consumers.
b. economies of scale : Increased efficiency and often reduced costs resulting from an
increase in the size of operations or amount of production.
c. overhead : Costs of the physical aspects of doing business.
2. Describe how economies of scale reduces prices and increases profits.
They buy a lot of a product from a company for cheap and then resell it cheaply too so everyone
will want it
3. Describe the costs associated with doing business online and compare those costs to traditional
retail outlets.
Online has to pay for software developers, shipping costs and bandwith while traditional needs
land and money for employees
6. List the reasons why big Internet companies can undersell their competitors.