Download ECONOMICS FINAL EXAM

ECONOMICS FINAL EXAM
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STUDY GUIDE
CHAPTER 1
Define the following: scarcity, factors of production, gross domestic product (GDP), entrepreneur, economics,
land, labor, capital, need, want, opportunity cost, utility, value, consumer goods, durable goods, nondurable
goods, paradox of value, factor market, wealth, service, good, specialization, division of labor, economic
interdependence, trade-off, production possibilities frontier (PPF), free enterprise economy, standard of living
1) What do economists use to describe that most things in life aren’t free?
2) What are the key elements of the scope of economics?
3) Three basic questions to make economic choices
4) What are examples of capital?
5) Why is scarcity a problem around the world?
6) Who decides what, how much and for whom to produce?
7) What does land include? What does labor include?
8) What factors impact quantity and quality of labor?
9) Who drives the economy? How do they?
10) Why is economics also considered a social science?
11) How are services different than goods?
12) What does the value of a good or service depend on?
13) Who came up with the paradox of value?
14) How is utility and value related to each other?
15) What does monetary value mean? How is it measured?
16) What does the PPF display?
17) A company cannot his full what if not all resources are used?
18) Who makes the decision in a free enterprise economy?
19) What is an example of how opportunity costs and trade-offs are considered in a production possibilities
frontier?
20) What are some examples of businesses in the free enterprise economy?
21) How does the study of economics help citizens?
22) Standard of living is based on what?
23) What is an exchange for one thing in return for another?
CHAPTER 2
Define the following: socialism, traditional economy, inflation, command economy, fixed income, voluntary
exchange, communism, market, consumer sovereignty, market economy, private property rights, competition,
modified free enterprise, mixed economies, profit motive, capitalism
1) What are the disadvantages of a market economy?
2) What are the characteristics of a traditional economy?
3) What is the role of government in socialism? capitalism? communism?
4) What effect does efficiency have on the number of goods available?
5) What does the government do to ensure security for the American people?
6) What are the advantages of a command economy?
7) How does the government benefit when entrepreneurs are successful?
8) What does economic freedom allow people to do?
9) What does the government do as the role of protector in the U.S.? producer? consumer?
10) What does the federal government provide to its citizens? state government? local government?
11) What are the economic and social goals of the United States?
12) What is an example of when there is an increase in the minimum wage raises the unemployment rate?
13) What are some societies that use traditional economies?
CHAPTER 3
Define the following: conglomerate, depreciation, collective bargaining, merger, public utility, proprietorship
nonprofit organization, net income, dividends, cooperative
1) What are advantages and disadvantages of proprietorships, partnerships, and corporations?
2) How are corporations formed?
3) What are some expenses that firms have to deal with?
4) How is depreciation a noncash charge?
5) What is the relationship of a conglomerate and multinational?
6) What are some nonprofit organizations?
7) How does a horizontal merger work?
8) How does a vertical merger work?
9) What are some occupations that professional associations represent?
10) How does the government play a direct role in the economy?
11) How does the government play an indirect role in the economy?
CHAPTER 4
Define the following: demands, microeconomics, demand schedule, demand curve, Law of Demand, change in
quantity demanded, substitution effect, substitutes, complements, elasticity, demand elasticity, elastic, inelastic,
unit elastic
1) What two variables does demand involve?
2) What causes a change in demand?
3) Why do economists express something as a “law”?
4) What is the reason we as a consumers buy something in the first place?
5) What do we encounter as we buy more and more of something?
6) When a demand curve is shifting to the right, what does that mean for the demand?
7) Demand changes because of the change in the determinants of demand. What are the determinants of
demand?
8) What are some examples of substitutes? examples of complements?
9) What kind of relationship does elasticity have in economics?
10) Why are examples of unit elasticity difficult to find?
11) Why would quantity demanded stay relatively the same for an inelastic good despite a change in price?
12) Why would a new business adjust prices a number of times for a new product that comes out?
13) What are three questions to ask for determinants of demand elasticity?
14) What is total expenditure?
15) What is the formula to figure out total expenditure?
CHAPTER 5 SECTION 1
Define the following: supply, Law of Supply, supply schedule, supply curve, change in supply, change in
quantity supplied, subsidy, supply elasticity
1) What does the Law of Supply states that more will be offered at higher prices in hopes of leading to what?
2) Who normally has the freedom to adjust production up or down?
3) In what two ways can supply be illustrated by?
4) Do substitutes have any effect on supply elasticity?
5) Changes in supply can increase or decrease because of what seven things?
6) What else besides the portion of income is not important to supply elasticity?
7) If a firm takes longer to react to a changing price then what happens to supply?
8) If a firm quickly reacts to a changing price then what happens to supply?
9) What must be done to the first and second supply curves to get the market supply curve?
10) concept of supply is based on __________ made by producers?
11) What does it mean when the supply curve shifts to the left?
12) How does technology effect change in supply?
13) How does government regulations effect change in supply?