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Unit 1 Exam Review

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					Unit 1 Exam Review
                  Ch. 1
• What causes scarcity?
• How do businesses rely on individuals in
  the factor and product markets?
• How do individuals rely on businesses in
  the factor and product markets?
• Using the Production
  Possibilities curve on the
  right, explain the following:
   – The meaning of the blue
     curved line
   – The meaning of both the A
     and X variable
   – The benefit and opportunity
     cost of movement on the
     curve from B to D
   – How can this business
     increase its production
     possibilities frontier curve so
     that it can produce at X?
                      Ch. 2
• How do traditional economies discourage new
  ideas for improving the economic well-being of
  the people?
• Explain the following quote:
  – “From each according to his means, to each
    according to his needs.”
• Give an example and explain how two economic
  goals can conflict with each other.
• Compare an advantage and a disadvantage of a
  command and market economy.
• Compare an advantage and a
  disadvantage of a command and market
  economy.
• Briefly explain how YOU believe an
  increase in the minimum wage would
  affect the circular flow of economic activity.
                  Ch. 3
• Compare any business type to any food
  item. Choose three or four characteristics
  that they share and explain.
• What is the difference between a
  horizontal and vertical merger?
• Give two reasons businesses merge.
• Why would a business want to become a
  conglomerate?
• Why should members of a general
  partnership be concerned about the
  financial responsibility of their partners?
• How do non-profits affect the circular flow
  of economic activity?

				
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