Work through the list without notes. If you cannot do a statement, follow its link, then come back. Guide = study guide; Practice = practice questions.
Understanding
- I can explain why scarcity forces every society to allocate resources. (Guide: “The problem every economy must solve”)
- I can state the three basic questions and say which one a given decision answers. (Guide: “The three basic questions”; Practice Q1, Q5(a))
- I can define an economic system as institutional arrangements plus a coordinating mechanism. (Guide: “What an economic system is”)
- I can describe how a command, a market and a mixed economy each answer what, how and for whom. (Guide: comparison table; Practice Q3)
- I can name the coordinating mechanism of each system: a central plan, prices, or prices plus government decisions. (Guide: Figure 2; Practice Q2)
Skills
- I can classify a described economy using evidence about both ownership and coordination. (Guide: Worked example 1; Practice Q3, Q6)
- I can draw a labelled spectrum of economic systems and place economies on it with reasons. (Guide: Figure 1; Practice Q6)
- I can calculate the total cost of two production methods and find which one a market firm chooses. (Guide: Worked example 2; Practice Q4)
Reasoning
- I can explain how input prices signal scarcity and guide the “how” decision in a market. (Guide: Worked example 2; Practice Q4(d))
- I can explain, using information and incentives, why central planning can lead to shortages and surpluses. (Guide: “Command economy”; Practice Q5)
- I can give a strength and a limitation of each system, including who may go without under a market answer to “for whom”. (Guide: comparison table; Practice Q5(d))
- I can state similarities and differences between the systems and explain the limitations of the models. (Guide: “Similarities, differences and limitations of the models”; Practice Q7)
All ticked? Move on to Topic 1.3, the production possibilities curve, or return to the course roadmap.