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ECONOMICS FINAL EXAM STUDY GUIDE
MS. DEANGELIS
FINAL EXAM: THURS, JANUARY 19
Your exam will cover the semester’s worth of material that we have
covered both in class and in your textbook:
Ch. 1, Ch. 2, Ch. 4, Ch. 5, Ch. 7, and Ch. 11
You may use this study guide on your exam.
ECONOMICS Ch. 1 and 2 STUDY GUIDE
1.1 Scarcity and the Factors of Production:
-need
-land
-want
-labor
-economics
-capital
-goods
-physical capital
-services
-human capital
-scarcity
-entrepreneur
-shortage
-factors of production
1.2 Opportunity Cost
-trade-off
-guns or butter
-opportunity cost
-thinking at the margin
1.3 Production Possibilities Curves
-PPC
-law of increasing cost
-PPF
-efficiency
-underutilization
-cost
2.1 Answering the Three Economic Questions
-economic system
-centrally planned economy
-factor payments
-command economy
-patriotism
-mixed economy
-safety net
-standard of living
-traditional economy
-market economy
2.2 The Free Market
-market
-specialization
-household
-firm
-factor market
-self interest
-incentive
-competition
-invisible hand
-consumer sovereignty
2.3 Centrally Planned Economies
-socialism
-communism
-authoritarian
-collective
-heavy industry
-profit
-product market
-Adam Smith
2.4 Modern Economies
-laissez faire
-continuum
-private property
-transition
-free enterprise
-privatize
Ch. 4 Study Guide
4.1
demand
law of demand
substitution effect
income effect
demand schedule
market demand schedule
demand curve
4.2
4.3
ceteris paribus
elasticity of deman
normal good
inelastic
inferior good
elastic
complements
unitary elastic
substitutes
total revenue
Be able to:
Explain the law of demand.
Understand how the substitution effect and the income effect influence decisions.
Identify the determinants that create changes in demand and that can cause a shift in the
demand curve.
Explain how the change in the price of one good can affect demand for a related good.
Indentify factors that affect elasticity.
Explain how firms use elasticity and revenue to make decisions.
Ch. 5 Study Guide
5.1
supply
law of supply
quantity supplied
supply schedule
variable
market supply schedule
supply curve
market supply curve
elasticity of supply
5.3
subsidy
5.2
marginal product of labor
increasing marginal returns
diminishing marginal returns
fixed cost
variable cost
total cost
marginal cost
marginal revenue
operating cost
excise tax
regulation
Be able to:
Explain the law of supply.
Explain the relationship between elasticity of supply and time.
Analyze the production costs of a firm.
Explain how a firm decides to shut down an unprofitable business.
Ch. 7 Market Structures
Section 1: Perfect Competition
-perfect competition -barriers to entry
-start-up costs
-commodity
-imperfect competition
Section 2: Monopoly
-monopoly
-economies of scale -natural monopoly
-government monopoly
-patent -franchise
-license
-price discrimination -market power
Section 3: Monopolistic Competition and Oligopoly
-monopolistic competition -differentiation
-nonprice competition
-oligopoly
-price war
-collusion
-price fixing
-cartel
Section 4: Regulation and Deregulation
-predatory pricing
-antitrust laws -trust
-merger
-deregulation
Be able to:
Describe the four conditions that are in place in a perfectly competitive market.
List common barriers that prevent firms from entering a market.
Describe prices and output in a perfectly competitive market
Describe characteristics and give examples of a monopoly.
Describe how monopolies are formed, including government monopolies.
Explain how a firm with a monopoly sets output and price.
Describe characteristics of monopolistic competition.
Explain how firms compete without lowering prices.
Describe an oligopoly and give examples of one.
Explain market practices that the government regulates or bans to protect competition.
Ch. 11: Financial Markets
11.1: Saving and Investing
-investment
-financial system
-financial asset
-mutual fund
-diversification
-portfolio
-prospectus
-return
11.2: Bonds and other Assets
-maturity
-yield
-savings bond -municipal bond
-corporate bond
-junk bond
-Securities and Exchange Commission
-money market
-capital market
-primary market
11.3 The Stock Market
-share
-equities
-capital gain
-capital loss
-stock split
-stockbroker
-brokerage firm
-stock exchange
-Nasdaq
-OTC market -futures
-options
-call option -put option
-bull market
-bear market
-The Dow
-S & P 500
-Great Crash
-speculation
Understand the benefits and risk of buying stock.
Describe how stocks are traded.
Identify how stock performance is measured.
Explain the causes and effects of the Great Crash of 1929.
Understand how investing contributes to the free enterprise system.
Identify different types of bonds.