Economics
Final Exam Study Guide
Unit 1: Know the following terms and be able to answer the following questions
opportunity Cost-
service-
Voluntary Exchange-
Natural Resources-
Market Economy-
Command Economy-
Mixed Economy-
How does the US Government pay for most public goods and services?
What is the relationship between opportunity costs and trade-offs?
What makes an economic decision rational?
Additional Skills needed from this unit: Be able to read a PPC graph and determine the opportunity cost when moving between different points on the graph.
Unit 2: Know the following terms and be able to answer the following questions
Substitute products-
Complementary Products-
Shifters of Demand- know how these could shift the demand curve
Number of consumers
Income
Complements
Expectations
Substitutes
Tastes and Preferences
Shifters of Supply- know how these could shift the supply curve
Government regulations
Resources (price and availability)
Expectations
Education
Technology
Sellers (number of)
Price Ceiling-
Price floor-
Surplus-
Shortage-
What is the difference between a change in supply and demand and a change in quantity supplied and demanded?
Additional Skills required from this unit: be able to shift a supply and demand graph and determine the new equilibrium price and quantity. Be able to read the graph to determine the affects of a price ceiling or floor on the market.
Unit 3: Know the following terms and be able to answer the following questions
Unlimited liability-
Unlimited life-
Double taxation-
Sole Proprietorship-
Partnership-
Corporation-
Monopoly-
Oligopoly-
Monopolistic competition-
Pure/Perfect competition-
Why do businesses consider incorporating?
Fill out the following chart on Business Organizations
Sole Proprietorship partnership Corporation
Advantages Advantages Advantages
Disadvantages Disadvantages Disadvantages
Fill our the following Chart on Market Structures
Market Structure Number of Sellers Barrier to entry Product differentiation Market Control
Monopoly
Ex:
Oligopoly
Ex:
Monopolistic Competition
Ex:
Pure/Perfect Competition
Ex:
Additional Skills required from this unit: Be able to read a circular flow diagram and determine what is being exchanged on each line.
Units 4 and 5: Know the following terms and be able to answer the following questions
Expansionary policy or easy money policy-
Contractionary policy or tight money policy-
GDP-
Reserve Requirement-
Budget Deficit-
Budget Surplus-
What groups of people are helped by inflation?
What groups of people are hurt by inflation?
What are the different types of unemployment?
What types of things are not included in GDP?
Additional Skills required from this unit: Understand what is happening with the economic indicators in the different stages of the business cycle. Be able to read a scenario and determine the affect on the aggregate supply or demand.
Unit 6: Know the following terms and be able to answer the following questions
Balance of trade-
Trade deficit-
Trade surplus-
Tariff-
Quota-
Embargo-
Subsidy-
Standard-
NAFTA-
Appreciation (strong)-
Depreciation (weak)-
What are the arguments in favor of trade barriers?
Additional Skills required from this unit: Be able to read an exchange rate table. Be able to determine absolute and comparative advantage. Be able to determine if the dollar is getting stronger or weaker from a scenario.
Unit 7: Know the following terms and be able to answer the following questions
Credit union-
APR-
Premium-
Deductible-
Interest charged-
Interest earned-
Disability insurance-
Life insurance-
What are the safest financial assets?
What is the relationship between risk and reward?
What types of things go into determining your creditworthiness?
