Unit 0 Mastery Review Packet
Principles of Free Enterprise
Unit 0 Study Guide
Active Recall & Conceptual Preparation Worksheet
Student Worksheet
Name: ______________________
Class Period: ___________
Date: _________________
I. Core Review Questions
1. Why is scarcity considered a universal, permanent condition, whereas a shortage is only temporary?
Answer:
2. When an individual makes an economic choice, how is their opportunity cost calculated?
Is opportunity cost the monetary sum of every single option you declined, or is it defined by the single next-best alternative?
Answer:
3. Explain the Rational Decision Rule. At what exact point is a cost-benefit analysis successful?
Under what conditions (relating Marginal Benefit and Marginal Cost) will a rational actor choose to take action?
Answer:
4. What is the fundamental difference between a movement along a curve vs. a shift of the entire curve?
What is the ONLY variable capable of causing a movement along a product's supply or demand curve?
Answer:
II. Core Terminology Definitions
Unit 0 Foundations
•
Scarcity: __________________________________________
•
Opportunity Cost: __________________________________
•
Physical Capital: __________________________________
•
Human Capital: ____________________________________
Market Dynamics
•
Law of Demand: ____________________________________
•
Law of Supply: ____________________________________
•
Substitution Effect: _________________________________
•
Market Equilibrium: ________________________________
UNIT 0 EXAM MASTER STUDY GUIDE Page 1 of 2
Principles of Free Enterprise
Part II: Graphs, Interventions, & Writing
Active Practice & Shifter Masterclass
III. Government Price Controls
Price Ceilings:
- • What is the legal definition of a price ceiling?
- • Where must it be set relative to market equilibrium to be binding?
- • Does a binding ceiling result in a shortage or a surplus?
- Answers: _____________________________________
Price Floors:
- • What is the legal definition of a price floor?
- • Where must it be set relative to market equilibrium to be binding?
- • Does a binding floor result in a shortage or a surplus?
- Answers: _____________________________________
IV. Graph Shifting Sketch Practice
Review your 4 primary shift scenarios. Sketch demand/supply curves, identify the shift direction, and mark final price & quantity changes.
Scenario A Supply Shifts Right
[Sketch Here]
Scenario B Supply Shifts Left
[Sketch Here]
Scenario C Demand Shifts Right
[Sketch Here]
Scenario D Demand Shifts Left
[Sketch Here]
V. The ACE Economic Writing Strategy Practice
Writing Checklist:
A - Answer Claim
C - Specific Evidence
E - Explain Why
Define the direct market answer in A, support with evidence/shifters in C, and explain the supporting logic step-by-step in E.
Practice Prompt Bank (Choose ONE to draft):
Option 1: How does a strict rent ceiling set below market equilibrium impact long-term urban apartment availability?
Option 2: If hot dog prices rise to all-time highs, how does it affect the demand for hot dog buns (a complement)?
Option 3: The government imposes a per-unit production tax on sports drinks. Describe the effect on equilibrium price.
A: _____________________________________________________________________
C: _____________________________________________________________________
E: _____________________________________________________________________
UNIT 0 EXAM MASTER STUDY GUIDE Page 2 of 2
ACE Writing Strategy Graphic Guide
Economic Writing Masterclass
The ACE Writing Strategy
How to construct flawless, model-based logical arguments in economics.
Universal Template
Model Analysis Prompt: “How does an early winter frost in Florida affect the market for orange juice?”
Unit 0 Context
A
Answer the Question
The Claim
Universal Rule
Directly state your answer in the first sentence. This does not require specific evidence/examples, just an answer.
Unit 0 Model Analysis
“The equilibrium price of orange juice will increase, and the quantity sold will decrease.”
• Meets rule by identifying BOTH variables (Price and Quantity) immediately.
C
Cite Economic Evidence
The Trigger
Universal Rule
Identify the economic/personal finance evidence that would be used to support your answer from A. This is where you become more specific in your short answer.
Unit 0 Model Analysis
“This occurs because an early winter frost is an adverse weather event that destroys crops, shifting the supply curve to the left.”
• Meets rule by defining the market shifter & citing supply curve's leftward movement.
E
Explain the "Why"
The Mechanism
Universal Rule
Simply explain why your evidence supports your answer.
Unit 0 Model Analysis
“As supply declines, equilibrium will shift up in price and thus down in quantity sold/bought. This creates a temporary shortage due to fewer oranges being in the market for production.
• Meets rule by showing buyer actions and how disequilibrium (shortage) forces price adjustment.
FRQ Response Checklist
Self-assess your work before submission
Mentioned both P & Q? Named Curve & Direction? Traced Disequilibrium?
THE ACE WRITING METHOD • ECONOMIC ANCHOR CHART Page 1 of 1
ACE Writing Prompts Worksheet
Principles of Free Enterprise
ACE Writing Prompts
Practice constructing model-based logical arguments using Answer, Cite, and Explain.
Student Practice
Name: ______________________
Class Period: ___________
Date: _________________
Directions: Read each scenario carefully. Respond to each prompt using the ACE method: Answer the question directly with your primary claim, Cite specific economic evidence (shifters, curve movements, or graphs), and Explain the step-by-step logical connection.
Prompt 1 Price Controls
Topic: Rent Ceilings
The city of Metropolis passes a law establishing a binding rent ceiling on all apartments. Predict the long-term impact on the quantity of apartments available to renters, and identify the resulting market condition.
A
Answer: __________________________________________________________________________________
C
Cite Evidence: ___________________________________________________________________________
E
Explain Why: ____________________________________________________________________________
Prompt 2 Market Dynamics
Topic: Related Goods
Due to an exceptional coffee bean harvest, coffee prices fall to a historic low. Analyze how this change affects the equilibrium price and quantity in the market for coffee creamer (a complementary good).
A
Answer: __________________________________________________________________________________
C
Cite Evidence: ___________________________________________________________________________
E
Explain Why: ____________________________________________________________________________
Prompt 3 Government Action
Topic: Per-Unit Tax
The government imposes a $1.00 per-unit tax on the producers of sports drinks. Predict the final change in the equilibrium price of sports drinks and identify which curve shifts as a result.
A
Answer: __________________________________________________________________________________
C
Cite Evidence: ___________________________________________________________________________
E
Explain Why: ____________________________________________________________________________
THE ACE WRITING METHOD • STUDENT PRACTICE SHEET Page 1 of 1
