Economics Final Exam Study Guide
Please also review your Basics, all lecture notes, all reading notes, and charts/graphs from class. Use our class website
(http://mrsthomsenecon.wordpress.com) to get copies of old work or to re-watch the PPT slide shows/notes.
True/False
1. Opportunity costs are roughly the same for everyone who attends college.
2. Trade-offs are another way of talking about opportunity costs.
3. Macroeconomics considers the study of both the small and big picture.
4. Globalization is expanding everyone’s ability to potentially sell to more people.
5. Communism and socialism have similar characteristics.
6. Today in North Korea, the government owns almost all the resources in the country.
7. In their books, Adam Smith and Karl Marx both state that capitalists improve the condition of workers.
8. Profit is the amount of money left over after all the costs of production have been paid.
9. Total cost is the average cost of a good multiplied by the number of units sold.
10.
11.
12.
13.
14.
15.
Practice these questions and graphs:
Rationing exists because of
The opportunity cost of something is
The marginal cost of something is
If your parents offer you cash for every A on your report card, that is an example of
Animals are classified as which of the following factors of production?
Scarcity exists when
16. On the accompanying production possibilities graph, which point or points are possible?
17. On the accompanying production possibilities graph, which point represents the maximum production of snowboards?
18. On the accompanying production possibilities graph, which point or points are not possible?
19.
20.
21.
22.
23.
24.
25.
How a society answers the three economic questions defines
Resources are owned and controlled by private individuals in what type of economic system?
In a traditional economy, people
With globalization, the world is moving toward
Offshoring refers to
In a socialist economic system, the government
What are the three economic questions?
26.
27.
28.
29.
30.
31.
32.
33.
34.
35.
36.
37.
38.
39.
40.
41.
42.
43.
44.
45.
46.
47.
48.
49.
50.
Adam Smith believed
The responsibilities of people in a free enterprise economy include
Which of the following is not a feature of free enterprise?
Eminent domain refers to
The circular flow diagram shows
What is a public good?
What is a private good?
An externality exists when
Positive externalities occur when one person’s actions
A negative externality
The circular flow has two loops. What do they represent?
A market is any place
In economics, demand means
Demand curves
What could increase demand for a good?
A shift of the demand curve represents
If demand for a good is elastic and its price decreases, total revenue
The law of demand can be represented
If the demand for computers increases, the demand curve will
When goods are substitutes, what happens to the demand?
With complementary goods, what happens to the demand?
Elasticity of demand measures
The law of supply says that
Quantity supplied refers to
A vertical supply curve indicates that
Use these two graphs to answer the following questions.
51.
52.
53.
54.
On the accompanying graph, what shift correctly represents the supplier’s response to a decrease in the costs of production?
If the price of a product increases, we would expect the accompanying graph to show
The law of supply is shown on a graph as
Elasticity of supply is measured by looking at the relationship between
Use these two graphs to answer the following questions.
55. If a tax were applied to the firm’s product, what would represent the seller’s response?
56. If a new quota were imposed on a seller’s product, what would show the seller’s response?
57. If prices fall for a product, we could expect the graph to show
58. An advance in technology would be illustrated on a graph as
59.
60.
61.
62.
63.
Equilibrium price is
Equilibrium can be expressed as
A price floor results in
A legal maximum price at which a good can be sold is a
At the equilibrium price, what is true?
Use these four graphs to answer the following questions.
Changes in the Equilibrium Price
64.
65.
66.
67.
Which graph illustrates what would happen if candy producers are informed that the cost of sugar has doubled?
Which graph reflects the impact on the market for drinking water as the result of a hurricane that hits Florida?
Which graph reflects the impact on the market for homes as new construction companies build houses in Houston, Texas?
Which graph reflects the impact on the market for VCRs as consumers purchase more and more DVDs?
68.
69.
70.
71.
72.
73.
74.
75.
76.
77.
78.
79.
80.
81.
82.
83.
84.
85.
86.
87.
88.
89.
90.
91.
92.
93.
94.
95.
96.
97.
98.
99.
100.
In the accompanying graph, which area shows a surplus?
In the accompanying graph, which area shows a shortage?
When deciding between jobs, people consider
Minimum wage is
Increasing your educational level can
A union is
If the union and the employer are unable to reach an agreement, the union may
Credit cards are not considered ____________.
We refer to the Fed as the central bank because it is
Why is Paper money used?
When a good or service has been counted in GDP more than once, we refer to that as
Illegal goods and services are not counted in GDP because
If a product is produced but not purchased, it
The term per capita means
GDP is better than GNP at calculating
GNP is better than GDP at calculating
A decrease in the average level of prices is called
Inflation generally
The two types of fiscal policy are
Fiscal policy addresses
The money left over to spend after all deductions have been made from people’s earnings is called
Expansionary policy:
Contractionary policy by the Fed
The largest source of tax revenues for the federal government comes from
Sales taxes are applied to purchases such as
An example of an excise tax is a tax on
Property tax is a major source of revenue for
Those subject to the alternative minimum tax are people
A stock
A company that wants to raise money may
When a company offers to sell its stock to the public for the first time, it is called a(n)
The share of the profits of a corporation, paid out to stockholders, is
Currently the Dow Jones Industrial Average is composed of
Which part of this review was easiest for you?
Where do you need to study more?
**This review will be due on the day of the final. Final schedule: (1st period=Wednesday, January 19th, 3rd and 5th periods=
Thursday, January 20th, 2nd and 4th periods=Friday, January 21st)**