All AP Macro Micro Notes

Satisfactory Essays
Topics: Corporation
Micro:
Floor: govt imposed limit or minimum price that can be charged for a good or service
Price floor holds no weight unless the price equilibrium falls below it

Production possibilities and Trade offs
a. PPC defined
b. Economic model that provides the opportunity cost
c. PPC examples
d.

Resources are not equally suited to both items
Comparative advantage­condition in which a nation state is capable of producing some product at a lower opportunity cost examples of advantage and trade

avocado

soy beans

avocado prod

soybean prod

us

9

3

1/3

3

mexico

8

2

1/4

4

cloth

coco

cloth prod

coco prod

pakistan

5000

1000

1/5

5

belgium

1000

5000

5

1/5

Command Economy
USA Market Economy
/­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­­/

Market economy­ economic system characterized by private ownership of property and the un regulated exchange of goods and services
1. private property
2. earned profits
3. freedom of choice
Command Economy­Communism­ a central authority directs all economic activity
19th century development Mixed Economy­socialism
*other economic systems exist such as traditional 1. Market
a. Goods and services market
b. Factor Markets
2. HOuse holds
a. People living together making joint decisions
3. Businesses a private entity that makes goods and services ownes 1.
2.
3.
4.

#ownes

Liability

Man.
Enterpri
se

ease to start end

%of busines ses

% of ex. receipts

Sole

1

unlimite d limited

easy

75%

5%

polar opposite s

Partners hip more than 1

unlimite d still limited but not as bad

easy hard

15%

15%

N16
Doctor

corporat ion thousan ds limited

vast

hard impossi ble

5%

75%

walmart

franchise= corporation
Government political institutions that apply normative values

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