Study sheet: Chapter 2: The Power of Trade and Comparative AdvantageAbsolute AdvantageComparative AdvantageOpportunity CostProduction Possibilities FrontierTrade. How does specialization and trade make individuals and countries wealthier?Think about why countries benefit from foreign trade. Also consider a scenario where Country A is moreproductive than Country B at producing all goods. Why is it still in Country A’s best interest to trade withCountry B? Chapter 3: Supply and DemandDemand Curve and Factors that shift the Demand CurveSupply Curve and Factors that shift the Supply CurveSubstitutes and ComplementsNormal Goods and Inferior GoodProducer Surplus and Consumer Surplus Chapter 4: Equilibrium: How Supply and Demand Determine PricesSurpluses and ShortagesEquilibrium PriceEquilibrium QuantityHow does an outward shift in the demand curve affect equilibrium price and quantity?How does an inward shift in the demand curve affect equilibrium price and quantity?How does an outward shift in the supply curve affect equilibrium price and quantity?How does an inward shift in the supply curve affect equilibrium price and quantity? Chapter 5: Price Ceilings and FloorsGive an Example of a Price Floor and a Price CeilingWhy do most economists oppose price floors? What are their negative consequences?Why do most economists oppose price ceilings? What are their negative consequences?Why do many economists think that stores should be allowed to raise their prices after a natural disaster? What are some arguments against price gouging?Rent ControlNew York City’s rent control laws are widely criticized. However, local elected officials have not abolished rent control. Why?Minimum Wage Law Chapter 6: GDP and the Measurement of ProgressHow is GDP calculated? Think of some example of goods and services that would not be included in a country’s GDP?Understand the formula Y = C + G + I = NXWhy are economists interested in a country’s GDP. Why is it good for a country to have a high GDP?What is the difference between a country’s real GDP and a country’s nominal GDP. Why is real GDP growth a better measure of the health of the economy than nominal GDP growth.What is a recession. What is a business fluctuation or business cycle?GDP is an important measure of the economy. However, there are some problems with using GDP to measure economic output. These problems include (Failure to count the underground economy, Failure to count non-priced production, failure to count environmental costs, failure to count the health of nations, and failure to measure the distribution of income. Chapter 7: The Wealth of Nations and Economic GrowthWhat is meant by physical capital? What is meant by human capitalWhat are examples of growth miracles? What are examples of growth disasters?What are some institutions that help facilitate economic growthWhy do many countries have trouble developing institutions like honest government and property rights that foster economic growth? Chapter 8: Growth Capital Accumulation, and the Economics of Ideas: Catching up vs. Cutting EdgeWhat leads to more productivity (or more economic growth)? How can labor, physical capital, human capital, population and ideas all lead to more productivity?What is meant by diminishing marginal productivity? When capital levels are low, why does increases capital lead to big gains in productivity. After a certain point, why do subsequent increases in capital lead to smaller gains in productivity?What is meant by catching up growth? What is meant by cutting edge growth? Why do economists consider the United States to have cutting edge growth while China has catching up growth?Why do many economists believe that China’s economic growth will slow in the future?How does the U.S. government (and other governments) incentivize the production of ideas.Why do governments need to incentive the production ideas. Think about intellectual property rights and spillovers effects.What is meant when economists say a good is non-rival or jointly supplied?Chapter 10: Stock Markets and Personal FinanceWhat is the difference between passive investing and active investing?Why is it hard to beat the market?Efficient Market HypothesisWhy is it (usually) a good idea to diversify one’s stock holdings?Explain the tradeoff between return and riskWhat are some costs and benefits of stock markets? Chapter 11: Unemployment and Labor Force ParticipationHow is the labor force calculated? How is the unemployment rate calculated?Who do some people think that the unemployment rate is a poor indicator of the level of unemployment or the performance of the labor market (or the economy)What is the difference between cyclical unemployment, frictional unemployment, and structural unemploymentHow do unemployment benefits the minimum wage, employer protection laws, and unions increase the amount of structural unemploymentWhat is the natural unemployment rate?

Question

Study sheet:  Chapter 2: The Power of Trade and Comparative AdvantageAbsolute AdvantageComparative AdvantageOpportunity CostProduction Possibilities FrontierTrade. How does specialization and trade make individuals and countries wealthier?Think about why countries benefit from foreign trade. Also consider a scenario where Country A is moreproductive than Country B at producing all goods. Why is it still in Country A’s best interest to trade withCountry B? Chapter 3: Supply and DemandDemand Curve and Factors that shift the Demand CurveSupply Curve and Factors that shift the Supply CurveSubstitutes and ComplementsNormal Goods and Inferior GoodProducer Surplus and Consumer Surplus Chapter 4: Equilibrium: How Supply and Demand Determine PricesSurpluses and ShortagesEquilibrium PriceEquilibrium QuantityHow does an outward shift in the demand curve affect equilibrium price and quantity?How does an inward shift in the demand curve affect equilibrium price and quantity?How does an outward shift in the supply curve affect equilibrium price and quantity?How does an inward shift in the supply curve affect equilibrium price and quantity? Chapter 5: Price Ceilings and FloorsGive an Example of a Price Floor and a Price CeilingWhy do most economists oppose price floors? What are their negative consequences?Why do most economists oppose price ceilings? What are their negative consequences?Why do many economists think that stores should be allowed to raise their prices after a natural disaster? What are some arguments against price gouging?Rent ControlNew York City’s rent control laws are widely criticized. However, local elected officials have not abolished rent control. Why?Minimum Wage Law Chapter 6: GDP and the Measurement of ProgressHow is GDP calculated? Think of some example of goods and services that would not be included in a country’s GDP?Understand the formula Y = C + G + I = NXWhy are economists interested in a country’s GDP. Why is it good for a country to have a high GDP?What is the difference between a country’s real GDP and a country’s nominal GDP. Why is real GDP growth a better measure of the health of the economy than nominal GDP growth.What is a recession. What is a business fluctuation or business cycle?GDP is an important measure of the economy. However, there are some problems with using GDP to measure economic output. These problems include (Failure to count the underground economy, Failure to count non-priced production, failure to count environmental costs, failure to count the health of nations, and failure to measure the distribution of income. Chapter 7: The Wealth of Nations and Economic GrowthWhat is meant by physical capital? What is meant by human capitalWhat are examples of growth miracles? What are examples of growth disasters?What are some institutions that help facilitate economic growthWhy do many countries have trouble developing institutions like honest government and property rights that foster economic growth?  Chapter 8: Growth Capital Accumulation, and the Economics of Ideas: Catching up vs. Cutting EdgeWhat leads to more productivity (or more economic growth)? How can labor, physical capital, human capital, population and ideas all lead to more productivity?What is meant by diminishing marginal productivity? When capital levels are low, why does increases capital lead to big gains in productivity. After a certain point, why do subsequent increases in capital lead to smaller gains in productivity?What is meant by catching up growth? What is meant by cutting edge growth? Why do economists consider the United States to have cutting edge growth while China has catching up growth?Why do many economists believe that China’s economic growth will slow in the future?How does the U.S. government (and other governments) incentivize the production of ideas.Why do governments need to incentive the production ideas. Think about intellectual property rights and spillovers effects.What is meant when economists say a good is non-rival or jointly supplied?Chapter 10: Stock Markets and Personal FinanceWhat is the difference between passive investing and active investing?Why is it hard to beat the market?Efficient Market HypothesisWhy is it (usually) a good idea to diversify one’s stock holdings?Explain the tradeoff between return and riskWhat are some costs and benefits of stock markets? Chapter 11: Unemployment and Labor Force ParticipationHow is the labor force calculated? How is the unemployment rate calculated?Who do some people think that the unemployment rate is a poor indicator of the level of unemployment or the performance of the labor market (or the economy)What is the difference between cyclical unemployment, frictional unemployment, and structural unemploymentHow do unemployment benefits the minimum wage, employer protection laws, and unions increase the amount of structural unemploymentWhat is the natural unemployment rate?

Accepted Answer

Hi! Thank you for the question, As per the honor code, we are allowed to answer three sub-parts at a…

Study sheet: Chapter 2: The Power of Trade and Comparative Advantage Absolute Advantage Comparative Advantage Opportunity Cost