Economics Final Exam Review
1. Each could either be in matching format or multiple choice. Know examples and understand
each concept fully (Don’t just look up book definition; won’t be enough for most of them.)
a. Goods and Services
b. Paradox of Value
c. The Factors of Production (Land, Labor, Capital, and Entrepreneurship)
d. Division of Labor
e. Economics
f. Economic Systems (Free Market, Command, Mixed, and Traditional)
g. Productivity
h. Inflation
i. Private Property Rights
j. Profit Motive
k. Consumer Sovereignty
l. Utility
m. Competition
n. Economic Growth
o. Voluntary Exchange
p. Capitalism
q. Inferior vs. Normal goods
r. Supply and Demand
s. Theory of production
t. Law of Variable Proportions
u. Marginal Revenue
v. Variable Cost
w. Subsidy
x. Total Product
y. Production Function
z. Profit-Maximizing Quantity of Output
aa. Total Cost
bb. E-Commerce
cc. Supply and Demand Equilibrium
dd. Shortages and Surpluses on the Supply and Demand graph
ee. Price Ceilings and Price Floors on the Supply and Demand graph
ff. Externalities (Positive and Negative)
gg. Resource Immobility
hh. Public vs. Private goods
ii. Public Disclosure
jj. Economies of Scale
kk. Collusion
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ll. Market Failure
mm.
Price Discrimination
nn. Specialization
oo. Absolute and Comparative Advantage
pp. Infant Industries
qq. Foreign Exchange Rates
Why is the study of economics so important?
What does “there is no such thing as a free lunch” mean?
What is the purpose of the government in all types of economic systems?
Who controls the products being produced in a Free market economy?
Go back to your Business Organizations table and study the Advantages and Disadvantages of
Sole Proprietorships, Partnerships, and Corporations.
Understand the Law of supply and the Law of Demand.
What factor is the overlying factor that dictates Elasticity of Supply?
What two factors does the theory of production deal with?
Understand the graphs for the Supply and Demand: Shortages, Surpluses, Price Floors, and Price
Ceilings.
Why will the government interfere in the market economy by setting prices with price floors and
price ceilings?
Know and understand the characteristics of Market Structures: Perfect Competition,
Monopolistic competition, Oligopoly, and Monopoly.
Why are monopolies such rare occurrence in the free market system?
What are the most common forms of market failures? What results from each?
Why are externalities considered a market failure?
Know the different types of Monopolies.
What is the purpose of government regulation?
What are the characteristics of money?
What were the problems of currencies issued by the state banks?
What is the gold standard? Why was it abandoned? What were its advantages and
disadvantages?
What are all the functions of money?
What are the arguments for free trade vs the arguments for protectionist?
Know and understand the different types of unemployment.