Chapter 1 Vocab List:
Section 1:
Scarcity
factors of production (land, labor, capital, entrepreneur)
Gross Domestic Product
Production
Durable Good
non-durable good
Section 2:
service
Good
capital goods
consumer good
utility
market
productivity
specialization
Section 3:
Opportunity Cost
standard of living
Power Points:
Resource
Marginal decisions
Marginal analysis
Incentive
Equilibrium
Externalities
Model
Production possibility frontier (PPF)
Household
Firm
Factor market
Forecast
Normative economics
Positive economics
General terms to know:
Microeconomics
Macroeconomics
Chapter 2 Vocab List
Section 1:
Economic system
traditional economy
command economy
market economy
mixed economy
stagnation
Section 2:
social security
minimum wage
inflation
deflation
fixed income
Section 3:
Free enterprise
Voluntary exchange
capitalism
private property rights
profit
profit motivation
competition
consumer sovereignty
Other Notes
Strong command
Moderate command
Planned economy
Socialism
Communism
Privatization
Chapter 3
-sole proprietorship
partnership
limited partnership
bankruptcy
corporation
charter
stock
dividends
bond
merger
depreciation
horizontal merger
vertical merger
conglomerate
multinational
non-profit organization
cooperatives
Chapter 4
demand
Law of demand
Demand schedule
Demand curve
Market demand curve
marginal utility
diminishing marginal utility
change in quantity demanded
income effect
substitution effect
change in demand
substitutes
complements
elasticity
demand elasticity
elastic
inelastic
unit elastic
Power Point Notes:
Quantity demanded
Perfect substitutes
Inferior good
Normal good
Household demand
Market demand
Price elasticity
Chapter 5 Study Guide
supply
law of supply
subsidy
supply elasticity
production function
short run
long run
total product
marginal product
raw materials
diminishing return
fixed cost
overhead
variable cost
total cost
marginal cost
marginal analysis
Quantity supplied
Total revue
Marginal revenue
Power Point Notes
Supply schedule
Supply curve
Input
Market supply
Equilibrium
Surplus
Shortage
Chapter 6
Price
Rationing
Ration coupons
Rebate
Price ceiling
Minimum wage
Price floor
Target price
Nonrecourse loan
Deficiency payment
Conservation Reserve Program
Chapter 7 Vocab List
Market structure
Perfect competition
Imperfect competition
Monopolistic competition
Product differentiation
Collusion
Government monopoly
Geographic monopoly
Natural monopoly
Oligopoly
Technological monopoly
Price-fixing
Monopoly
Nonprice competition
Market failure
Public goods
Externality
Negative externality
Positive externality
Public goods vs private goods
Price discrimination
Trusts
Public disclosure
Chapter 9:
Incidence of a tax
Individual income tax
sin tax
sales tax
progressive tax
regressive tax
proportional tax
IRS
indexing
FICA
Medicare
estate tax
gift tax
custom duties
intergovernmental revenue
property tax
flat tax
excise tax
user fees
alternative minimum tax
capital gains
corporate income tax
Value Added Tax
Chapter 10 Vocab List
Pork
Public sector
Private sector
Transfer payment
Grant-in-aid
Subsidy
Distribution of income
Mandatory spending
Discretionary spending
Fiscal year
Appropriations bill
Budget deficit
Budget surplus
Medicare
National debt
Medicaid
Balanced budget amendment
Intergovernmental expenditures
Trust funds
Per capita
Crowding-out effect
Line-item veto
Entitlements
Spending caps
Chapter 11:
Saving
Savings
Certificate of deposit
Coupon rate
Financial assets
Financial system
Financial intermediaries
Finance company
Pension
Bond
Coupon rate
Municipal bond
Corporate bond
Government bond
Treasury notes
Treasury bills
Treasury bonds
IRA
Capital Market
Money Market
Equities
Portfolio diversification
Mutual fund
Securities exchange
Over the counter market
Dow Jones Industrial Average
Standard and Poor’s 500
Bull Market
Bear Market
Roth IRA
Liquidity
Rule of 72
New York Stock Exchange
American stock Exchange
Nasdaq
Chapter 13 Vocab List
Business cycle
Recession
Peak
Trough
Expansion
Trend line
Depression
Leading economic indicator
Econometric model
Inflation
Deflation
Price index
Market basket
Consumer Price Index
Creeping inflation
Hyper inflation
Stagflation
Demand-pull inflation
Cost-push inflation
Underemployed
Frictional unemployment
Structural unemployment
Technological unemployment
Cyclical unemployment
Seasonal unemployment
Misery index
Possible Essay Questions:
-Name the three major types of economic systems and discuss the advantages and disadvantages of
each. Lastly, which type of economic system is the United States most like? Support your answer with
examples.
-What is competition? What are the positives and negatives of competition for consumers. Lastly, how
do businesses compete? Support every aspect of your answer with examples.
-Name and explain the three main types of income taxes. Which system is used and the United States
and do you agree with it. Support your answer.
What factors can change shift demand and supply? Give examples.
Possible Short Answer Topics
Chapter 1:
What are the three basic economic questions that must be answered?
Name and explain the four factors of production.
What is the circular flow of economics?
What is the difference between the product market and the factor market?
Chapter 2:
Three main types of economies
-advantages and disadvantages
Name and briefly explain the 7 economic goals?
Name and explain the 5 characteristics of a free enterprise economy?
What is the role of the government in a free enterprise economy?
What is the role of the consumer in a free enterprise economy?
Chapter 3:
What are the advantages and disadvantages of the different types of business structures?
Why do business merge?
Give an example of a horizontal merger and a vertical merger.
What is conglomerate?
Chapter 4:
What is the difference between a change in the demand and a change in quantity demanded?
Name the factors that can change the demand for a product? Give a specific example of each.
Describe the three determinates of elasticity.
What are inelastic and elastic products? Give examples.
Chapter 5:
What is the difference between a change in the supply and a change in quantity supplied?
What is the difference between a fixed cost and a variable cost? Give examples.
Name and explain the stages of production.
What is marginal analysis?
Name and explain the factors that can shift supply.
Chapter 6:
What are the four advantages of price?
What is rationing and what are its disadvantages?
Give examples of price ceilings and price floors.
What are the problems with rationing?
Chapter 7:
Name the four market structures.
What are the four main types of monopolies
Name the Five factors that can cause markets to fail.
What are externalities? Give examples.
What are public Goods?
Chapter 9:
Name and explain the three criteria for effective taxes.
Name and explain the two principles of taxation.
Name and explain the three main types of taxes.
Largest sourcses of revenue for the different units of government.
What will cause future tax reform?
Chapter 10:
Explain the two types of spending.
What is the difference between the national deficit and the national debt?
Largest sourcses of spending for different units of government.
What are the impacts of the national debt?
Chapter 11:
What factors need to be considered when investing?
Types of bonds
Investment options.
Difference between Roth and 401K IRA’s.
What is the rule of 72
What are the most risky and least risky investment options
Chapter 13:
Name three causes of the Great Depression.
Name and explain the 5 types of unemployment.
Name 4 causes of inflation.
What are the stages of the business cycle?
What are the results of inflation?
Name the four possible causes of changes in the business cycle?
What got us out of the Great Depression? Name two factors.
What is the Consumer Price Index?