Name: ____________________________________ Pd ___ Date ___ / ___ / ___ Mr. Henry Economics Final Exam Study Guide – Final Exam 100 Pts. Chapters 1 through 14 – This study guide contains questions from your Unit 1-4 Tests Wednesday - 74 Points – Multiple Choice – Scantron Thursday - 20 points Essay (two 10 pt. essays) & 6 pts. Subjective 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) 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? 2) What are the two main reasons why socialism would be less efficient than capitalism? 3) What are some personal qualities that a sole proprietor might need to form a successful proprietorship? 4) Developed product known as Under Armor at the University of Maryland 5) Provides an ethical marketplace where buyers & sellers can trust each other 6) Risk-taking individual in search of profits 7) Quality of life based on the ownership of the necessities and luxuries that make life easier 8) Developed the perfect fitting jeans at a reasonable price; known as the Gap 9) Income that does not increase when prices increase 10) Why might a business not want to have a large inventory of parts and supplies on hand? 11) What are the three basic questions that scarcity forces every society to answer? 12) What are some personal qualities that a sole proprietor might need to form a successful proprietorship? 13) What is TINSTAAFL, where did TINSTAAFL originate, and cite one example of TINSTAAFL? 14) Describe each of the 4 factors of production 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 is a problem that an economist would have in measuring marginal utility? 2) How many CDs would Mike buy at a price of $20? How many would Julia buy at the same price? What is the total number of CDs that would be bought at $10? 3) Why is the use of the production function important in business? 4) What is an example of a negative and positive externality that you have encountered? 5) Enforces laws to ensure purity, effectiveness, and truthful labeling of food, drugs, and cosmetics; inspects production and shipment of these products 6) Administers antitrust laws forbidding unfair competition, price fixing, and other deceptive practices 7) Licenses and regulates radio and television stations and regulates interstate telephone and telegraph rates and services 8) Regulates and supervises the sale of listed and unlisted securities and the brokers, dealers, and bankers who sell them 9) Administers federal labor-management relations laws; settles labor disputes; prevents unfair labor practices 10) Oversees the airline industry 11) Investigates and rules on charges of discrimination by employers and labor unions 12) Protects and enhances the environment 13) Investigates accidents in the workplace; enforces regulations to protect employees at work 14) Develops standards of safety for consumer goods 15) Regulates civilian use of nuclear materials and facilities 16) Supervises transmission of various forms of energy 17)Yesterday, the price of envelopes was $3 a box, and Julie was willing to buy 10 boxes. Today, the price has gone up to $3.75 a box, and Julie is now willing to buy 8 boxes. Is Julie's demand for envelopes elastic, inelastic, or unit elastic? P1 $3 P2 $4 Q1 10 Q2 8 Show the equation, answer, and whether it is elastic, inelastic, or unit elastic. 18) Name the three questions for the determinants of demand elasticity 19) What is e-commerce and what are the differences between an e-commerce store and a traditional business? 20) List & describe the 5 reasons for a change in demand 21) List & describe the 5 reasons why market failures occur 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 Treasury Bond Tax-exempt Savings Bond 403B 401K two tier wage system glass ceiling set aside contract Investment tax credit Capital gains Flat tax Value-added tax Line-item veto Entitlement Treasury Bill IRA Mutual Fund 1) This created Interstate Commerce and the minimum wage laws, which established a 40 hour work week? 2) This is the explanation of wages rates relying on supply and demand? 3) Wage, fringe benefit, or work rule given up when renegotiating a contract? 4) A criteria for effective taxes that avoids tax loopholes, exceptions, or oversights in the tax law is called? 5) FICA stands for? 6) What are examples of Pennsylvania state owned universities? 7) This amendment created the Federal Income Tax? 8) The advantage of the Value Added Tax is: 9) This U.S. President had a balanced budget from 1998 to 2001 due to expenditure cuts in Defense? 10) The 1st federal income tax was enacted during this time period in U.S. history? 11) Trade unions and industrial unions developed in the U.S. in response to increased industrial activity after this event? 12) What is the amount of Social Security that is taken out of someone’s paycheck? 13) This U.S. President in 1960 had a balanced budget? 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 1) How many district or reserve banks are there? 2) Who approves the Board of Governors for the Fed? 3) How many Board of Governors are there for the Fed? 4) Which district bank is guaranteed a vote in the FOMC? 5) The number of district or reserve banks that have a vote in the FOMC are? 6) Who appoints 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) Our U.S. dollar name grew from this country’s taler? 9) This type of fiscal policy is one in which fiscal policies do not require new or special action to go into effect and react automatically when the economy changes? 10) This type of stabilization policy is designed to stimulate output and lower unemployment by increasing production rather than by stimulating demand? 11) The Fed monetary Policy Tool in which the Fed can buy and sell government securities in financial markets? 12) What are the 12 district or reserve banks? 13) FDIC stands for? 14) The Fed Advisory Committee that provides advice on matters concerning the overall health of the economy is? 15) The Anti-Poverty Program that gives cash payments to the blind or disabled over age 65 is? 16) The Anti-Poverty Program that gives cash payments for the death, absence, or disability of a parent? 17) Each of the following are consequences of unemployment with the exception of? 18) List and describe the 4 main categories of items that are excluded from the GDP. 19) The four characteristics of money are? 20) The three factors of population growth are? 21) The three functions of money are? Review your Reference Section (Budgeting, Rent, Credit, Checking, and Buying a Car) 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 Describe how scarcity determines people’s choices and the 3 basic questions that help guide society in regards to scarcity. 2 With the value of the dollar in question, what are other smart investments that one can make? 3 What were policies that were enacted by the government during the Great Depression and how did they impact the economy? 4 Describe each of the three types of nonprofit organizations describe how each works and cite specific examples of each nonprofit. 5 Describe 5 of the 7 Federal Budget expenditures. 6 What is the view of Adam Smith (Ch 1) and cite specific examples on nonessential vs. essential items. SHORT ANSWER SUBJECTIVE: 1 With the issue of minimum wage, I feel that… 2 Why are positive externalities in society a plus for us and cite an example of a positive externality in your life. 3 How does a rebate entice the consumer and cite an example of a rebate in your lifetime. 4 A company using only U.S. workers and U.S. parts is a good idea / bad idea because… 5 I feel that the Fed’s monetary policies / Government’s fiscal policies are more effective because… 6 The item that I will most take with me from this course was…because…