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People gain from their ability to trade with one another.

Explain how an attempt by the government to lower inflation could cause unemployment to increase in the short-run. Demonstrate your answer by explaining Philips Curve. | Chapter 4 | List and explain in detail four determinants of the price elasticity of demand. | E. personal computers or IBM personal computers | Supply is more elastic in the long run. | Be ready to define any economic terms on Key Concepts. |


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  1. American teenagers and their free time
  2. Answer the following questions. Say what people were doing at the time mentioned.
  3. B) According to the purpose of a presentation we can differentiate its various types. Match the presentation types (A-H) to the things (1-8) that people say at them.
  4. B) Ask your fellow-students to give their responses.
  5. B) Write sentences of your own using the phrases in bold type. Address them to the other students who should reply them expressing their approval or disapproval.
  6. BEAMS AND THEIR TYPES
  7. BEAMS AND THEIR TYPES

Competition results in gains from trading.

Trade allows people to specialize in what they do best.

 

6.Markets are usually a good way to organize economic activity.

In a market economy,households decide what to buy and who to work for.

Firms decide who to hire and what to produce.

Adam Smith made the observation that households and firms interacting in markets act as if guided by an “ invisible hand. ”

Because households and firms look at prices when deciding what to buy and sell, they unknowingly take into account the social costs of their actions.

As a result, prices guide decision makers to reach outcomes that tend to maximize the welfare of society as a whole.

 

 

7.Governments can sometimes improve economic outcomes.

When the market fails (breaks down) government can intervene to promote efficiency and equity.

Market failure occurs when the market fails to allocate resources efficiently.

Market failure may be caused by an externality, which is the impact of one person or firm’s actions on the well-being of a bystander.

Market failure may also be caused by market power,whichis the ability of a single person or firm to unduly influence market prices.

8.The standard of living depends on a country’s production.

Standard of living may be measured in different ways:


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Marginal changes in costs or benefits motivate people to respond.| Efficiency v. equity Making decisions requires trading off one goal against another.

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