2. Economics Final Review Mr. Alvarez Laguna Beach High School

3. Mr. Alvarez - Economics Review Please graph the following data series -- remember to create clear, readable graphs! Supply of Suntan Lotion in the LB Price per Tube of Lotion Quantity of Tubes of Lotion (in hundreds) $1.001 $2.001.1 $4.001.5 $5.001.7 $6.001.9 $7.502 $8.502.2 $9.002.5 $9.502.8 $10.003 (keep Y axis $0-$12)(keep x axis 1-5) Questions: 1)Does the graph show an elastic or inelastic supply curve? 2)What would cause a movement along the supply curve? **Assuming it is not a change in Q 3)Give two separate examples of factors that would result in a change in the supply of tubes of suntan lotion? 4)What would happen to the curve in your two previous examples?

4. Mr. Alvarez - Economics Review Inelastic steep curve!!!

5. Mr. Alvarez - Economics Review PPC Curve Draw a production possibilities curve depicting the classic “Guns versus Butter” scenario. Make the Y axis Quantity of Guns and the X axis the Quantity of Butter. Label point A where all resources are fully employed Label point B where some resources are idle or not employed efficiently Label point C where it is impossible to reach given the current resources available REMEMBER: The PPC curve illustrates opportunity cost

6. Mr. Alvarez - Economics Review PPC Curve Y X A B C GunsGuns Butter

7. Mr. Alvarez - Economics Review Economics may best be defined as a? Macroeconomics is? Micro is? In market economy, the decision of WHAT to produce is often determined by? What are the strengths and weaknesses of a command economy?

8. Mr. Alvarez - Economics Review What is a complement and substitute for a DVD player? Why would the demand for a DVD player be elastic? The four factors of production are? What is an example of each? Describe Adam Smith’s economic concept of the division of labor/specialization.

9. Mr. Alvarez - Economics Review What is an interest rate? Define: Discount Rate, Federal Funds Rate & Prime Rate What tools does the Federal Reserve Bank have to influence interest rates (monetary policy)? What direction would the Fed want interest rates to go during a recession?

10. Mr. Alvarez - Economics Review fiscal policy Remember to review fiscal policy in addition to monetary policy. study guide The study guide has additional important concepts!

11. Mr. Alvarez - Economics Review Good Luck Class of 2012! Mr. Alvarez NOW STUDY!!!!!!!!!!!!!!