Download Standards Study Guide – Economics

Standards Study Guide – Economics
Directions: Respond to each of the following on a separate sheet of paper.
Fundamentals of Economics:
1.
Define scarcity (include unlimited wants and productive resources)
2.
Define and give examples of land
3.
Define and give examples of labor
4.
Define and give examples of capital (human and physical)
5.
Define and give examples of entrepreneurship
6.
What are 3 ways to allocate scarce resources?
7.
Define opportunity cost
8.
How does a production possibilities curve illustrate trade offs between two options?
9.
How do rational decisions occur? (think marginal benefits vs. marginal costs)
10.
What are 3 ways businesses and individuals specialize?
11.
Why do people engage in voluntary, non-fraudulent exchange?
12.
Define command economy.
13.
Define mixed economy.
14.
Define market economy.
15.
How do the 3 economic systems differ in terms of private ownership, profit motive, consumer
sovereignty, competition, and government regulation?
16.
What are the 3 basic economic questions?
17.
Why does the government provide public goods and services?
18.
Why does the government redistribute income?
19.
Why does the government protect property rights?
20.
Why does the government resolve market failures?
21.
What are 2 examples of government regulations or deregulations and their effect on consumers
and producers?
22.
Define productivity. (inputs vs. outputs)
23.
How does investment in equipment and technology (physical capital) lead to economic growth?
24.
How can investment in higher education (human capital) lead to a higher standard of living?
------------------------------------------------------------------------------------------------------------------------------------------Microeconomics:
25.
Draw a circular flow diagram. (include: product market, resource market, businesses,
households, government, flow of money)
26.
How does money facilitate exchange?
27.
Define the Law of Supply.
28.
Define the Law of Demand.
29.
How do buyers and sellers determine the market clearing price (price equilibrium)?
30.
Draw a supply and demand graph that illustrates equilibrium price. (don’t forget to label!)
31.
How does price serve as an incentive in a market economy?
32.
What are factors that cause changes in supply?
33.
Illustrate changes in supply on a graph. (both decrease and increase)
34.
What are factors that cause changes in demand?
35.
Illustrate changes in demand on a graph. (both decrease and increase)
36.
What is the relationship between a price floor and a surplus?
37.
What is the relationship between a price ceiling and a shortage?
38.
Illustrate a price floor/surplus on a graph.
39.
Illustrate a price ceiling/shortage on a graph.
40.
Define price elasticity of demand and supply.
41.
Draw a triple Venn diagram to compare and contrast: sole proprietorships, partnerships,
corporations.
42.
What is the relationship between entrepreneurs and profit?
43.
Identify the basic characteristics of a monopoly.
44.
Identify the basic characteristics of an oligopoly.
45.
Identify the basic characteristics of monopolistic competition.
46.
Identify the basic characteristics of pure competition (perfect competition).
------------------------------------------------------------------------------------------------------------------------------------------Macroeconomics:
47.
Define Gross Domestic Product (GDP).
48.
Define economic growth.
49.
Define unemployment.
50.
Define Consumer Price Index (CPI).
51.
Define inflation.
52.
Define stagflation.
53.
Define aggregate supply.
54.
Define aggregate demand.
55.
How are economic growth, unemployment, and inflation calculated?
56.
What are the 3 types of unemployment?
57.
Illustrate and define the stages of the business cycle.
58.
What is the difference between a recession and depression?
59.
What is the difference between the national debt and government deficits?
60.
How is the Federal Reserve System organized?
61.
What tools does the Federal Reserve use to promote price stability, full employment, and
economic growth?
62.
What is the difference between monetary policy and fiscal policy?
63.
Explain the government’s taxing and spending decisions.
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International Trade:
64.
Define both absolute advantage and comparative advantage.
65.
What is the difference between absolute advantage and comparative advantage?
66.
Why do most trades take place? (comparative advantage)
67.
What is the difference between balance of trade and balance of payments?
68.
What is a trade barrier?
69.
What are the costs and benefits of trade barriers?
70.
Identify 3 specific examples of trade barriers.
71.
Identify 3 specific examples of trading blocks.
72.
What are 2 pros of free trade? What are 2 cons of free trade?
73.
Define exchange rate.
74.
Where could you find information on exchange rates? Give 2 examples.
75.
Can you interpret an exchange rate table? If answer is NO, make sure to work on this.
76.
When exchange rates change, why do some groups benefit and others lose?
------------------------------------------------------------------------------------------------------------------------------------------Personal Finance:
77.
What are the reasons for the spread between interest charged and interest earned?
78.
What is the relationship between risk and return? (direct or indirect) Why?
79.
What are the major differences between stocks, bonds, and mutual funds?
80.
Who benefits and who loses from inflation?
81.
Define progressive taxes.
82.
Define regressive taxes.
83.
Define proportional taxes.
84.
How does an increase in sales tax influence the wealthy? The poor?
85.
What factors are considered to determine your credit worthiness?
86.
What is the difference between simple and compound interest rates?
87.
What are some different types of insurance? Give 3 examples.
88.
What is the purpose of car insurance? Home insurance? Health insurance? Life insurance?
89.
What types of skills are required to be successful in the workplace?
90.
What is the significance of investment in education, training, and skill development? (human
capital)