Name: ____________________________________ Pd ___ Date ___ / ___ / ___ Mr. Henry Honors Econ Final Exam Study Guide – 100 pts. total Chapters 1 through 15 Thursday = 74 Points – Multiple Choice – Scantron Wednesday = 20 points Essay (two 10 pt. essays) + 3 Subjective Questions Unit 1 Bond Capitalism Cash Flow Chamber of Commerce Command Economy Communism Common Stock Conglomerate Consumer Good Corporations Cost-Benefit Analysis Depreciation Dividend Double Taxation Economics Economic Inflation Interdependence Economic Model Factors of Production Fixed Income Free Enterprise Economy General Partnership Gross Domestic Product Horizontal Merger Human Capital Interest Limited Life Limited Partnership Market Market Economy Minimum Wage Mixed Economy Multinational Nonprofit Organizations Opportunity Cost Paradox of Value Partnerships Preferred Stock Principal Profit Motive Public Utility Scarcity Social Security Socialism Sole Proprietorships Specialization Trade-off Traditional Economy Unlimited Liability Vertical Merger Voluntary Exchange 1 What are the major differences between factor markets and product markets? 2 What effect do limited resources and unlimited wants have on the economy? 3 What was Adam Smith’s view of the relationship between a country’s wealth, its material possessions, and its people? 4 Which point on the Production Possibilities Frontier (see below) is the result of resources being idle, meaning that a country cannot reach its full production potential? 5 What are the two main reasons why socialism would be less efficient than capitalism? 6 Why might a business not want to have a large inventory of parts and supplies on hand? 7 What are the three basic questions that scarcity forces every society to answer? 8 What effect does economic efficiency have on the number of goods available? 9 What are some personal qualities that a sole proprietor might need to form a successful proprietorship? 10 What is TINSTAAFL, where did TINSTAAFL originate, and cite one example of TINSTAAFL? 11 Describe each of the 4 factors of production 12 Developed product known as Under Armor at the University of Maryland 13 Provides an ethical marketplace where buyers & sellers can trust each other 14 Provides a benefit to its members; like a credit union or Ocean Spray 15 Developed the perfect fitting jeans at a reasonable price; known as the Gap 16 Risk-taking individual in search of profits 17 What are the 5 Characteristics of Free Enterprise Capitalism 18 What are the 5 Roles of Government in Free Enterprise Capitalism 19 What are the 5 reasons for a merger 20 What are the 7 Economic and Social Goals that we have here in the United States? Unit 2 Break Even Point Cease and Desist Order Change in Demand Change in Quantity Demanded Collusion Deficiency Payment Demand Demand Curve Demand Elasticity Demand Schedule Diminishing Marginal Utility Diminishing Returns Economic Model Economies of Scale Elastic Equilibrium Price Externality Geographic Monopoly Government Monopoly Imperfect Competition Income Effect Inelastic Laissez-Faire Law of Demand Law of Supply Long Run Marginal Analysis Marginal Cost Marginal Product Marginal Revenue Marginal Utility Market Demand Curve Market Failure Market Structure Market Supply Curve Microeconomics Minimum Wage Monopolistic Competition Monopoly Natural Monopoly Negative Externality Nonprice Competition Nonrecourse Loan Oligopoly Overhead Perfect Competition Positive Externality Price Price Ceiling Price Discrimination Price-Fixing Price Floor Product Differentiation Public Disclosure Public Goods Rationing Ration Coupon Rebate Short Run Shortage Subsidy Substitution Effect Supply Supply Elasticity Surplus Target Price Technological Monopoly Total Revenue Trust Variable Costs 1 What causes a change in demand? 2 What problem might economists have in trying to measure marginal utility? 3 How does the supply curve compare to the demand curve you read about in Chapter 4? 4 How does the cost of resources affect the quantity offered for sale? 5 Why is the use of the production function important in business? 6 What steps can a company take if marginal cost is less than marginal revenue? 7 What would happen if consumers did not have easy access to information about products and services? 8 Enforces laws to ensure purity, effectiveness, and truthful labeling of food, drugs, and cosmetics; inspects production and shipment of these products 9 Administers antitrust laws forbidding unfair competition, price fixing, and other deceptive practices 10 Licenses and regulates radio and television stations and regulates interstate telephone and telegraph rates and services 11 Regulates and supervises the sale of listed and unlisted securities and the brokers, dealers, and bankers who sell them 12 Administers federal labor-management relations laws; settles labor disputes; prevents unfair labor practices 13 Oversees the airline industry 14 Investigates and rules on charges of discrimination by employers and labor unions 15 Protects and enhances the environment 16 Investigates accidents in the workplace; enforces regulations to protect employees at work 17 Develops standards of safety for consumer goods 18 Regulates civilian use of nuclear materials and facilities 19 Supervises transmission of various forms of energy 20 Write the equation for PEoD 21 What are the 5 Changes in the Determinants of Demand 22 What are the 5 main causes of market failures 23 What are the factors that could disturb an equilibrium market 24 What are the 4 types of costs that businesses must keep their eye on in order to produce efficiently 25 What are the 3 determinants of elasticity 26 What are the 5 necessary conditions that must be met for perfect competition Unit 3 Chapter 8 picket boycott lockout right to work law closed shop skilled labor seniority signaling theory collective bargaining grievance procedure mediation binding arbitration fact finding injunction giveback Chapter 9 Sin tax Tax loophole Benefit principle taxation Medicare Progressive tax Regressive tax FICA Payroll tax Excise tax Estate tax Gift tax Tax assessor Chapter 10 Pork Public sector Private sector Transfer payment Grant-in-aid Fiscal year Appropriations bill Budget deficit Mandatory spending Discretionary spending Medicaid Deficit spending Trust fund Per capita Crowding-out effect Chapter 11 Certificate of deposit Premium Pension Risk Bond Maturity Junk Bond Municipal Bond Beneficiary Treasury Note two tier wage system glass ceiling set aside contract Investment tax credit Capital gains Flat tax Value-added tax Line-item veto Entitlement Treasury Bond Tax-exempt Savings Bond 403B 401K Treasury Bill IRA Mutual Fund 1 Trade unions and industrial unions developed in the U.S. in response to increased industrial activity after this event? 2 This type of union arrangement is one in which nonunion workers must pay union dues or “fair-share”? 3 This is the process of negotiation which includes pay, benefits, and job-related items? 4 The economic impact of taxes in which the factors of production are affected when a tax is levied is called? 5 The Constitutional Amendment that enacted our current individual income tax system was? 6 What is the amount of Social Security that is taken out of someone’s paycheck? 7 This U.S. President in 1960 had a balanced budget? 8 This is a bond that carries an exceptionally high risk of nonpayment and a low rating? 9 This created Interstate Commerce and the minimum wage laws, which established a 40 hour work week? 10 This is the explanation of wages rates relying on supply and demand? 11 Wage, fringe benefit, or work rule given up when renegotiating a contract? 12 A criteria for effective taxes that avoids tax loopholes, exceptions, or oversights in the tax law is called? 13 FICA stands for 14 What are the Pennsylvania state owned universities 15 Ronald Reagan’s program in 1981 that lowered tax brackets from 16 to 13 and decreased the highest marginal tax rate from 70% to 50% was 16 The advantage of the Value Added Tax is 17 This created spending caps on discretionary spending but was abandoned by Congress 18 What are the 4 basic investment considerations Unit 4 Chapter 12 Macroeconomics Gross Domestic Product Real GDP Current GDP Gross National Product Census Center of Population Dependency Ratio Demographer Net Immigration Poverty Threshold Poverty Guidelines Lorenz Curve Earned Income Tax Credit Workfare Food Stamps Chapter 13 Trend Line Recession Trough Depression Scrip Economic Model Price Index Consumer Price Index Stagflation Hyperinflation Demand-Pull Inflation Cost-Push Inflation Outsourcing Unemployment Rate Cyclical Unemployment Seasonal Unemployment Structural Unemployment Chapter 14 Federal Reserve System Commodity Money Fiat Money Specie Measure of Value Store of Value M1 M2 State Bank Silver Certificate Bank Run Quantity Theoryof Money Bank Holiday Bank Holding Company Fractional Reserve System Regulation Z Easy Money Policy Prime Rate Chapter 15 Aggregate Supply Aggregate Demand Equilibrium Price Accelerator Fiscal Policy Keynesian Economics Automatic Stabilizers Entitlements Unemployment Insurance Supply-Side Policies Deregulation 1 The number of district or reserve banks that have a vote in the FOMC are 2 How many district or reserve banks are there 3 Which district bank is guaranteed a vote in the FOMC Monetarism 4 Who appoints the Board of Governors for the Fed 5 How many Board of Governors are there for the Fed 6 Who approves the Board of Governors for the Fed 7 This U.S. President announced a bank holiday on March 5, 1933, requiring every bank in the U.S. to close 8 The components of the output-expenditure model for GDP are 9 The Census Bureau uses this equation to calculate the unemployment rate 10 Our U.S. dollar name grew from this (country & currency name) 11 This type of fiscal policy is one in which fiscal policies are policies designed to strengthen the economy over a longer period of time 12 This type of stabilization policy is designed to stimulate output and lower unemployment by increasing production rather than by stimulating demand 13 What are the 12 district or reserve banks for the Fed 14 The Fed monetary Policy Tool in which the Fed can change the backing of existing deposits in the banking system 15 The Fed Advisory Committee that advises on matters pertaining to the Savings and Loan industry 16 The Anti-Poverty Program that gives cash payments for the death, absence, or disability of a parent 17 The Anti-Poverty Program that gives cash payments to the blind or disabled over age 65 18 What are the consequences of unemployment 19 What are the 4 main categories of items that are excluded from the GDP 20 The 3 functions of money are 21 The 4 consequences of inflation are 22 The 4 components of the National Income are 23 The 4 characteristics of money are 24 The 3 factors of population growth are Review your Reference Section (Budgeting, Rent, Credit, and Checking) Essays: A member of your class will roll a die to determine which 2 essays you will have to answer for your Exam. Below are the essays. In addition to the textbook/CD and class notes, you may utilize outside research for your essay preparation. You will not be permitted to have any notes with you the day of the exam. 2 Essays x 10 pts. each 1 Explain the problems the economy might face in recovering from a period of recession? 2 Cite examples in U.S. Economic history of how economic and legal institutions have developed policies to help sustain economic activity and growth in our country. 3 When analyzing the “Material Wealth” posters, describe 2 families that would be the “haves” and 2 families that would be the “have nots” and why. For the final point, describe what the typical American family would look like. 4 Explain the differences between elastic and inelastic goods in Economics and cite examples of goods for each and describe why they are elastic or inelastic goods. 5 What are reasons why imperfect competition exists in the United States and demonstrate your understanding of examples of imperfect competition. 6 What are the views and differences in views between John Maynard Keynes (Ch 15) and Adam Smith (Ch 1)? Subjective: 1 I feel that the government has / has not overstepped its role in the economy because… 2 An item from the course that I can now apply to my own life… 3 I feel that the best examples of wasted taxpayer money are… 4 Sequesters, government shut-downs, or budget disputes (at any level) can impact our economy by… 5 Describe one of the anti-poverty programs that you favor and why 6 Economics is an important course to study in high school because….