Micro Unit 1 Summary- Basic Economic Concepts

Mr. Clifford provides an overview of microeconomics unit 1, covering key concepts such as scarcity, opportunity costs, and trade-offs. The video introduces the factors of production and the production possibilities curve, explaining trade and comparative advantage. It also discusses economic systems, including free market and command economies, and concludes with the circular flow model, a fundamental concept in understanding microeconomics.

What is the primary reason for the existence of opportunity costs?

• Unlimited resources

• Abundance of goods

• Limited wants

• Scarcity of resources

What does the production possibilities curve illustrate?

• The benefits of trade

• The cost of production

• The trade-offs between producing different goods

• The relationship between supply and demand

How does trade affect the production possibilities curve?

• It flattens the curve

• It makes the curve steeper

• It shifts the curve outward

• It shifts the curve inward

What is the main characteristic of a command economy?

• There is no government intervention

• Resources are owned by individuals

• Prices are determined by supply and demand

• The government decides what to produce

What does the circular flow model represent?

• The impact of government policies on the economy

• The distribution of wealth in a society

• The relationship between different entities in capitalism

• The flow of goods and services in a command economy