Econ Test #3 Study Guide

The following questions will be required on your test on Wednesday, 10/4/23.
You will be expected to answer the questions in writing, using complete sentences, without the use of your notes. Be sure to address each part of the question and fully explain all your answers.

Questions a-c are the required new standards, questions d-g are for grade improvement.

Describe the effect of price controls on buyers and sellers. Provide two examples of price controls, be sure to explain what the price control is and how it affects both buyer and sellers.

Explain the role of profit as an incentive to entrepreneurs in a market economy. Provide evidence from two entrepreneurs to support your answer.

Explain a contemporary example of how the government is involved in the American market economy in two of the following ways: providing for national defense; addressing environmental concerns; defining and enforcing property rights; attempting to make markets more competitive; protecting consumers' rights.

Explain a mixed economy and why most societies today are identified as such. In your answer, be sure to clearly explain the economic systems involved in a mixed economy and one reason why governments might be involved in the economy.

In order for prices to function in a market economy and decide the basic economic questions there are 4 conditions they must meet. Explain those 4 conditions and why those must be met in order for prices to answer the basic economic questions.

Explain one reason for a change in supply and how it affects price. Explain one reason for a change in demand and how it affects price.

What is equilibrium price and why does the market move toward it?