Civics/Economics Final Exam Study Guide:
Chapters: The following is a list of chapters where the material for your exam will come from.
Chapter 1, Chapter 2, Chapter 3, Chapter 4, Chapter 5, Chapter 8, & Chapter 11
Chapter 1
Key Terms:
Scarcity
Economics
Factors of Production
Entrepreneur
Opportunity cost
Production Possibility Graph
Key Concepts:
Defining the differences between scarcity & shortage
Explain the differences between physical & human capital
Describe the factors of production
Explain the guns vs. butter dilemma
What is opportunity cost
Know the 6 core economic principles
Know and explain the production possibilities curve
Chapter 2
Key Terms:
Economic System
Standard of Living
Market, Centrally, Traditionally, Mixed Economies
Profit
Self Interest
Incentive
Competition
Adam Smith
Karl Marx
Communism
Socialism
Laisse Faire
Key Concepts:
Describe the four different types of economic systems.
Know the 3 basic economic questions every society must answer.
Be able to discuss the advantages and disadvantages of the different economic systems.
Compare & Contrast Animal Farm with communism & socialism.
Discuss the difference in economic philosophies by Adam Smith and Karl Marx.
Describe the flow of market activity in a free market economic system.
Chapter 3
Key Terms:
Public Interest
Public Disclosure Laws
Safety Net
Welfare
Public Goods
Freerider
Externality
Macroeconomics
Microeconomics
Technology
Key Concepts:
Discuss ways in which the government looks out for the public interest in economics.
Describe different safety nets and programs the government provides to help people with
economic assistance.
Explain the “free rider” problem.
Compare and contrast the differences between positive and negative externalities.
Be able to describe how the example of externalities was illustrated in the film, “A Civil
Action”.
Chapter 4
Key Terms:
Law of Demand
Demand Schedule
Substitution effect
Income effect
Demand curve
Inferior goods
Normal goods
Substitutes and complements
Elasticity of demand
Total revenue
Key Concepts:
Be able to read and plot a demand schedule and demand curve.
Describe the different determinants of demand and what makes the curve shift.
Understand the “law of demand”.
Be able to describe what elasticity of demand is.
Chapter 5
Key Terms:
Law of supply
Supply schedule
Elasticity of supply
Law of diminishing marginal returns
Fixed & variable cost
Subsidy
Excise tax
Regulations
Key Concepts:
Be able to read and plot a supply schedule and supply curve.
Describe the different determinants of supply and what makes the curve shift.
Understand the “law of supply”.
Be able to describe what elasticity of supply is.
Understand the costs of production.
Chapter 8
Key Terms:
Business Organizations
Sole proprietorship
Partnerships (general, limited)
Corporations
Business Franchise
Cooperative and Non Profit Organizations
Key Concepts:
Understand the differences between sole proprietorships, partnerships, corporations.
Compare and contrast the advantages and disadvantages of sole proprietorships,
partnerships, and corporations.
Chapter 11
Key Terms:
Investment
Financial Intermediaries
Mutual fund
Stock
Diversification
Rate of Return
Municipal Bond
Certificates of Deposit (C.D’s)
Stock exchanges
NASDAQ
New York Stock exchange
Bull and Bear markets
Stock Market crash of 1929
Buying on Margin
Blue Chip stocks
Penny stocks
Savings accounts
Security Exchange Commission (SEC)
Equities
Shares
Stockbroker
Prospectus
Rule 72
Key Concepts:
Understand the idea of diversification in investing.
Describe how stock is issued by corporations
Understand the “Pyramid of Investment Risk”
Describe the differences between saving vs. investing.
Be able to figure out how long it will take your money to double.