DO NOT WRITE ON THIS SHEET

DO NOT WRITE ON THIS SHEET

ECONOMICS Chapter 3 Part II - KEY

1. The standard we are covering is SSEF5. 2. Microeconomics is the study of the economic behavior and decision making of small units. 3. Examples of microeconomic units are: a. individuals b. families c. businesses 4. Macroeconomics is the study & decision making of entire economies. 5. Examples of macroeconomic units are: a. A nations business cycle b. gross domestic product c. inflation d. Economic growth 6. The gross domestic product is the total value of all final goods & services produced in a particular economy in a year. 7. An externality is an economic side effect of a good or service that generates benefits or costs to someone other than the person deciding how much to produce or consume. 8. Two types of externalities are: a. positive b. negative

Mr. Powers September 7, 2011

Economics Chapter 3 Private Goods v. Public Goods Graphic Organizer

Private Goods
Use the forces of supply & demand to produce & distribute goods & service
They are for profit

Public Goods
A shared good or service for which it would be impractical to make consumers pay individually and to exclude nonpayers Impractical or impossible to exclude nonpayers Consumption does not diminish benefits to others Financed by the public sector

They exclude nonpayers

They are rival and have competition

Mr. Powers September 7, 2011