Econ 312 Study guides, Class notes & Summaries

Chapter 02 The Market System and the Circular Flow 1. Contrast how a market system and a command economy try to cope with economic scarcity. 2. How does self-interest help achieve society’s economic goals? Why is there such a wide variety of desired goods and services in a market system? In what way are entrepreneurs and businesses at the helm of the economy but commanded by consumers? 3. Why is private property, and the protection of property rights, so critical to the success of the market s...

Briefly explain the use of graphs as a way to represent economic relationships. What is an inverse relationship? How does it graph? What is a direct relationship? How does it graph? Describe the graphical relationship between ticket prices and the number of people choosing to visit amusement parks. Is that relationship consistent with the fact that, historically, park attendance and ticket prices have both risen? Explain. Look back at Figure 2, which shows the inverse relationship between ticket...