Unit 1 Study Guide
Directions: On a separate piece of paper, define the following terms.
5. The 3 basic economic questions
6. Opportunity Cost
9. Land/natural resources
10. Circular Flow Model (Define and explain its components)*
11. Government regulation
12. Competition (Define and explain what its impact on the economy is)*
15. Capitalism/Free Enterprise (know the advantages and disadvantages)*
16. Mixed economy (know the advantages and disadvantages)*
17. Socialism (know the advantages and disadvantages)*
18. Economic Freedom
19. Property Rights
20. Production Possibilities curve (know what it is and what has to happen for the curve to move)*
21. Government and the circular flow (know what the interactions between government and firms and households are)
* = There will be several questions on the test about these concepts.