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Name:___________________________________________________Date:___________
Economics and Personal Finance
Mr. Capasso, Mrs. Surian,
Mr. Aiello, Ms. Clarke
Mr. Reiff, Mrs. Procaccini
Final Review Sheet
Exam Dates: ______________
Directions: Complete this review sheet thoroughly from your notes and handouts. Answer the
questions that follow. Use these questions as well as your notebook, vocab sheets and review
packet to study for your Exam.
1. Provide an example for the following:
a. Microeconomics -small eco decisions e.g. buying pair of pants
b. Macro Economics-eco topics on a larger scale; e.g. unemployment, min wage, GDP
c. Scarcity-limited resources . . and unlimited wants
2. Economic Systems: Who determines what is produced in each system?
Traditional Economy
Communities
Command Economy
Government controls all!!
Capitalist (Free Enterprise)
Consumers
3. What is the difference between tradeoff vs. opportunity cost?
t- choice
oc- value of what you didn’t choose
sec effect- consequence(s) of choice
4. Define the following:
a. Entrepreneur –risk taker, seeks profit, , sets up and operates a business
5. Explain the invisible hand and Lassiez-faire. Whose idea was this?
Adam Smith ( 1776)- laissez faire= Gov’t “hands off” the economy;
In a capitalist economy, the market regulates itself in that people
6. What is the difference between a Fixed Cost vs. Variable Costs?
Always from a business owner’s pt of view:
Fixed= costs that do not change e.g. rent, insurance etc
Variable= costs that can “vary”; e.g. wages, inventory etc
7. Provide an example for each
a. Regulation
Sherman Antitrust Act- regulates
monopolies in the US
b. Subsidy
When the Gov’t gives $ to businesses
(farmers) to not grow too many crops . . .
larger crops forces price down
c. Rationing
Usually during War Time
8. Illustrate each below: Demand Curve vs. Supply Curve and label Equilibrium for each
9. Is the difference between monopolistic competition and oligopoly?
Monopolistic competition-what we have in capitalism; many producers/businesses selling
many products= regular competition
Oligopoly- few producers of similar products; e.g. gas stations, airlines, cereal
10. What is the difference between a Natural Monopoly & a Monopoly?
A. E.g. natural monopoly-allowed bc the only places to obtain those specific resources;
e.g. PSEG= electric, SCWA= water
11. What is an example of Antitrust Legislation? What does it regulate?
Sherman Antitrust Act- regulates monopolies in the US
12. Explain the differences between partnerships, sole proprietorship, corporations and a
franchise. Liability for each business organization. (see chart in notebook for life and
liability)
Sole prop= 1 owner; unlimited liability; limited life
Partnership=2+ owners; unlimited liability; limited life
*Corporation=stockholders are owners limited liability; unlimited life
13. Provide an example for each of the following terms:
Patents
Legal document stating ownership of an
idea/invention
Franchise
Owner pays a fee to “parent” company to
use name and products
14. Do you know the following terms?
a. Capital gain-profit from stock investment
b. Capital Loss-opposite of above
c. Bear Market-stock market not doing well
d. Bull Market-stock market doing well
e. APR-Annual Percentage Rate (interest rate on CC or loan)
f. Bankruptcy-legal declaration that a judge has to approve . . stating you cannot pay
back your debt *Note: student loans MUST ALWAYS be paid back
g. FICO Score
h. Credit Card Act 2009
i. Liquidity- ability to turn something into cash (easily)
15. What is a labor unions and what are its goals?
Union= group of workers who join together to get fair wages, benefits, working hours etc
What is the process by which unions negotiate with management on the issue above?
COLLECTIVE BARGAINING
16. Savings and Investing (Explain the differences between the following?
Type of Savings
403B
IRA- Gov’t workers; no matching
Benefit
funds
529-
educational savings/investment
account
Certificate of Deposit (CD)
“time deposit” get interest on the
Bonds
maturity date e.g. 3 ,6,9,12 etc mos
EE Bonds- pay ½ of the FACE VALUE
Time Deposit
See above; has a date of MATURITY
401K
IRA- Individual Retirement Accountcompany may match your funds
Savings acct
Low interest; guaranteed, safe *FDICguarantees up to $250,000
Checking account
Extremely Low interest; $ flows in and
out; pay bills
Directions: Answer the following using complete sentences
17. Monetary Policy/Fiscal Policy
 How much money is being circulated in the ECONOMY for the upcoming year
 Role of The Federal Reserve- to maintain a stable money supply by controlling
(raising and lowering) interest rates!!
18. Explain the Rule of 72
 Methods for estimating an investment's doubling time
 72 is divided by the interest percentage obtain the approximate number of years
required for doubling
19. What is the difference between the New York Stock Exchange and NASDAQ-Amex?
NYSE- largest and most powerful stock exchange; regular stocks (DOW JONES)
NASDAQ-AMEX- technology stocks
20. Explain the Securities Exchange Commission. What does this regulate?
SEC- regulates stock trades and tries to stop insider trading
21. Explain the Job of the Federal Reserve System/Board? (Hint: It maintains a stable
money supply.) How does it do this? (see #17)
22. GDP-What does it measure? Explain 2 problems when counting GDP.
Gross Domestic Product- measures the total goods and services produced within 1
country within 1 year
Problems w/accuracy of GDP- underground economy ( “off the books” or illegal jobs )
and double counting-
23. Durable vs. Nondurable goods. Define and give examples of each.
Durable= lasts long
Nondurable=gets used up easily
24. What is the difference between Inflation and Deflation?
Inflation- general increase in prices
Deflation- opposite of above
25. What is the current NYS Minimum Wage? $8.75
What is the current Federal Minimum Wage? $7.25
Who makes min wage? Youth and elderly (low skilled)
26. Outsourcing (Advantages/Disadvantages) Companies that outsource. Who is helped by
outsourcing? Why is hurt?
PROS- Keeps costs down; cheap, hard working labor; quality decent
CONS- taking US jobs; $ leaving the country
FOX COMM- Apple outsources to this company
Additional Terms
FYI: Below is a list of terms from class. Several terms are vocab words; others were utilized in class
discussions and documents. YOU SHOULD BE FAMILIRA WITH ALL OF THESE TERMS FOR THE
FINAL EXAM.
1. Economics
2. Private (free) Enterprise
3. Trade off
4. Opportunity Cost
5. Capitalism
6. Communism
7. Traditional Economy
8. Market Economy
9. Command Economy
10. Mixed Economy
11. Microeconomics
12. Macroeconomics
13. Supply
14. Demand
15. Surplus
16. Shortage
17. Equilibrium Price
18. Substitute Goods
19. Complementary Goods
20. Allocation of Resources
21. Supply Curve
22. Demand Curve
23. Supply Schedule
24. Diminishing Marginal utility
25. Fixed Cost
26. Government Subsidy
27. Revenue
28. Monopoly
29. Natural Monopoly
30. Antitrust laws
31. Competition
32. Oligopoly
33. Entrepreneur
34. Corporation
35. Partnership
36. Sole proprietorship
37. Stock
38. Bond
39. Stock Share
40. NASDAQ
41. Dow Jones Industrial Average
42. New York Stock Exchange
43. S & P 500
44. Bull Market
45. Bear Market
46. SEC
47. 401k plan
48. 529 plan
49. 403b plan
50. Savings Account
51. Checking Account
52. Money Market Account
53. Bankruptcy (Chapter 11)
54. Time Deposit
55. Credit Card Act 2009
56. Credit Rating
57. FICO Score
58. Liquidity
59. Mortgage
60. FDIC
61. Credit History
62. Finance Charge
63. APR
64. GDP
65. Unemployment
66. Outsourcing
67. Cyclical unemployment
68. Seasonal Unemployment
69. Frictional Unemployment
70. Minimum Wage
71. Interest Rates
72. Durable Goods
73. Nondurable Goods
74. Comparative Advantage
75. Import
76. Export
77. Trade Deficit
78. Trade Surplus
79. NAFTA
80. Labor Union
81. Management
82. Collective Bargaining
83. Salary
84. Income
85. Comparative Advantage
ADDITIONAL NOTES: