**This study guide is designed to help you take notes and review for the final exam. This
list is not exhaustive. For example, the study guide point below may state that you need
to know the effect of expansionary fiscal policy. While it does not specifically state that
you need to know the effect on aggregate demand, you should know whether aggregate
demand increases or decreases and what that means for the price level and output.

Distinguish between microeconomics and macroeconomics.

Evaluate production bundles.

Discuss the circular flow diagram.

Define the law of demand.

Identify the determinants of demand. Compare inferior and normal goods.
Substitutes and complementary goods.

Evaluate an event and the affect on demand.

Define the law of supply.

Discuss the demand and supply for the factors of production in the resource
market.

Identify the determinants of supply.

Evaluate an event and the affect on supply.

Recall the non-price determinants of demand and supply. Examine an event to
determine how it affects demand or supply.

Evaluate a change in demand or supply in order to examine the equilibrium price
and quantity.

Define and calculate a shortage and surplus. Calculate using graph and
schedule.

Calculate producer and consumer surplus for an individual and for a market.

Calculate total economic surplus for an individual transaction and for the market.

Define and give an example of a positive (negative) externality.

Compare the private demand (supply) and social demand (supply) when a
positive (negative) externality exists. Discuss the allocation of resources as a
result.

Discuss, including examples, rival and excludable goods.

Identify implicit and explicit costs.

Calculate total revenue, economic cost, accounting profit, and economic profit.

Calculate average fixed cost, average variable cost, and average total cost.

Determine whether a firm should expand or reduce output based on the profit
maximizing condition.

Evaluate whether a firm should produce or shut-down in the short-run.

Evaluate the long-run situation for sellers in terms of profits and changing prices.

Discuss the characteristics of a Monopolistically Competitive Market. Evaluate an
industry for whether it is monopolistically competitive.

Discuss the characteristics of an Oligopoly. Evaluate an industry for whether it is
an oligopoly.

Discuss the characteristics of a Monopoly. Evaluate an industry for whether it is a
monopoly.

Calculate and interpret a Four Firm Concentration Ratio.

Evaluate the average tax rate to identify the type of tax: progressive,
proportional, or regressive.

Calculate the yearly budget for an economy.

Calculate national debt from a given set yearly deficits and surpluses.

Discuss the components of GDP using the expenditure approach. Evaluate and
calculate GDP.

Define and calculate nominal and real GDP.

Define and calculate economic growth.

Identify and discuss the factors contributing to growth.

Calculate the labor force and labor force participation rate.

Calculate the unemployment rate.

Identify and discuss the phases of the business cycle.

Discuss the types of unemployment rate.

Calculate CPI for a given year and the inflation rate.

Calculate nominal interest rates from real interest rates and the inflation
premium.

Determine whether a firm will undertake a project based on the real interest rate
and expected return.

Examine the determinants of aggregate demand. Categorize them based on their
component of GDP and describe how the change impacts the location of the
demand curve (shift left, right, or not at all).

Examine the determinants of aggregate supply. Describe how the change
impacts the location of the supply curve (shift left, right, or not at all).

Evaluate the changes in aggregate demand and aggregate supply in terms of the
equilibrium price level and output.

Describe expansionary and contractionary fiscal policy. Include a discussion of
when it is used, the tools, the effect on the aggregate demand/aggregate supply
model, and how it meets the goals of fiscal policy.

Evaluate the usefulness of fiscal policy in terms of the problems associated with
it.

Calculate a monetary multiplier.

Discuss the functions of money. Identify a use of money based on the function.

Graphically depict the market for money, including how the equilibrium is
determined.

Discuss the relationship between actual, required, and excess reserves. Use
them to make calculations in determining the amount of loans available.

Identify tools of monetary policy.

Describe how monetary policy is used to smooth the business cycle: the tools,
the process, and the goals of the policies.

Evaluate a situation to determine which country has a comparative advantage
and an absolute advantage.

Discuss how specialization is determined.

Discuss the foreign exchange rate market.

Evaluate a change in demand in an exchange rate market.

Evaluate a change in supply in an exchange rate market.

Discuss the Balance of Payments.