Final Exam Study Guide – 100 pts. total

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
Cash Flow
Chamber of Commerce
Command Economy
Common Stock
Consumer Good
Cost-Benefit Analysis
Double Taxation
Economic Model
Factors of Production
Fixed Income
Free Enterprise Economy
General Partnership
Gross Domestic Product
Horizontal Merger
Human Capital
Limited Life
Limited Partnership
Market Economy
Minimum Wage
Mixed Economy
Nonprofit Organizations
Opportunity Cost
Paradox of Value
Preferred Stock
Profit Motive
Public Utility
Social Security
Sole Proprietorships
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
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
Deficiency Payment
Demand Curve
Demand Elasticity
Demand Schedule
Diminishing Marginal Utility
Diminishing Returns
Economic Model
Economies of Scale
Equilibrium Price
Geographic Monopoly
Government Monopoly
Imperfect Competition
Income Effect
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
Minimum Wage
Monopolistic Competition
Natural Monopoly
Negative Externality
Nonprice Competition
Nonrecourse Loan
Perfect Competition
Positive Externality
Price Ceiling
Price Discrimination
Price Floor
Product Differentiation
Public Disclosure
Public Goods
Ration Coupon
Short Run
Substitution Effect
Supply Elasticity
Target Price
Technological Monopoly
Total Revenue
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
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
right to work law
closed shop
skilled labor
signaling theory
collective bargaining
grievance procedure
binding arbitration
fact finding
Chapter 9
Sin tax
Tax loophole
Benefit principle taxation
Progressive tax
Regressive tax
Payroll tax
Excise tax
Estate tax
Gift tax
Tax assessor
Chapter 10
Public sector
Private sector
Transfer payment
Fiscal year
Appropriations bill
Budget deficit
Mandatory spending
Discretionary spending
Deficit spending
Trust fund
Per capita
Crowding-out effect
Chapter 11
Certificate of deposit
Junk Bond
Municipal Bond
Treasury Note
two tier wage system
glass ceiling
set aside contract
Investment tax credit
Capital gains
Flat tax
Value-added tax
Line-item veto
Treasury Bond
Savings Bond
Treasury Bill
Mutual Fund
1 Trade unions and industrial unions developed in the U.S. in response to increased industrial activity after this
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
Gross Domestic Product
Real GDP
Current GDP
Gross National Product
Center of Population
Dependency Ratio
Net Immigration
Poverty Threshold
Poverty Guidelines
Lorenz Curve
Earned Income Tax Credit
Food Stamps
Chapter 13
Trend Line
Depression Scrip
Economic Model
Price Index
Consumer Price Index
Demand-Pull Inflation
Cost-Push Inflation
Unemployment Rate
Cyclical Unemployment
Seasonal Unemployment
Structural Unemployment
Chapter 14
Federal Reserve System
Commodity Money
Fiat Money
Measure of Value
Store of Value
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
Fiscal Policy
Keynesian Economics
Automatic Stabilizers
Supply-Side Policies
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
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
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)
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)?
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….