Final Exam Study Guide

Name: ____________________________________ Pd ___ Date ___ / ___ / ___ Mr. Henry
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
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) 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
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 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
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
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
Treasury Bond
Savings Bond
two tier wage system
glass ceiling
set aside contract
Investment tax credit
Capital gains
Flat tax
Value-added tax
Line-item veto
Treasury Bill
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
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
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
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
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)
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.
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…