Economics Review

People who produce goods and services.

• producer

• consumer

• market

What you give up when making a decision.

• long term goal

• opportunity cost

• producer

Read the following two statements:
***People want more things than they have money to buy.
***The goods and services a society can produce at any one time are limited.
What problem results from these two conditions? 

• Imbalance of Power 
• Scarcity
• Excessive Wealth
• Opportunity Cost

What is the role of the government in a command economy?

• It has little to say in which goods are produced.
• It does not influence which services are offered.
• It guarantees that consumers will earn a high income.
• It makes the most important economic decisions. 

Three statements are shown:
1. The desire for profits drives people to risk their time and resources.
2. Producers determine the supply of a product.
3. Consumers determine the demand for a product.
Which type of economy do these features describe? 

• A traditional economy.
• A mixed economy.
• A market economy.
• A command economy.

The Minister of Economics has created a plan for our national economy. It emphasizes the production of iron, steel, and hydroelectric power. In manufacturing, tanks and tractors will receive top priority. Consumer goods are regarded as less essential. Citizens are expected to sacrifice personal comfort for their country.
In what kind of economy does this Minister of Economics live in?

• This is an example of a COMMAND ECONOMY because the government is deciding what to produce, how to produce it, and who gets to have it.
• This is an example of a MARKET ECONOMY because the producers and consumers are deciding what to produce, how to produce it, and who gets to have it.
• This is an example of a TRADITIONAL ECONOMY because the family is deciding what to produce, how to produce it, and who gets to have it.
• This is an example of a MIXED ECONOMY because both the government and the people are deciding what to produce, how to produce it, and who gets to have it.

Selling standard, similar or rather same products is the characteristics for:

• Monopoly

• Monopolistic Competitive Market

• Oligopoly

• Perfectly Competitive Market

Few or Limited number of sellers selling similar or differentiated products would be classified under:

• Monopoly

• Monopolistic Market

• Perfect Competition

• Oligopoly

Perfect Competition 

• Type of market in which companies complete with each other on the basis of supply an d demand.  There are many sellers, and they are selling basically the same products. 
• Type of market in which there are few companies. One of these companies is a price leader raising the risk of a price war among sellers. 

Monopolistic Competition

• In this market there is only one seller, and the consumer must buy their products from that one company.
• In this market there are many companies, who are selling basically the same products.  In this market the company can differentiate their products, and practice non-price competition.