Download Ch. 1

Economics Trimester Study Guide
2010-2011
Ch. 1
1.
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Define Economics.
What is the fundamental economic problem facing all societies? Define this word
Define Need and Want.
What are the tree basic economic questions societies have to answer about the way their
resources are used?
5. Define Factors of Production.
6. What are the Factors of Production? Define each factor.
7. Define Good.
8. What is the difference between a consumer good and capital good?
9. What is the difference between a durable and nondurable good?
10. Define Consumer.
11. Define Trade-Offs.
12. Define Opportunity Costs.
13. If you had a choice between Panama City, Cruise, or Hawaii for your Senior trip and you
choose Hawaii as your top choice. What are the trade-offs? If you choose Panama City as your
second choice what is the opportunity cost?
Ch. 2
14. Define Economic System.
15. What are three types of economic systems? Define Each. Give an example and give one main
advantage and disadvantage of each.
16. Define Capitalism.
17. Define Free Enterprise.
18. What is the Entrepreneurs role in a free enterprise?
19. What is the Consumers role in a free enterprise?
20. What is the role of Government in a free enterprise?
21. Define Mixed Economy.
Ch. 3
22. Define Sole Proprietorship. List the advantages and disadvantages of Sole Proprietorships.
23. Define Partnerships. List the advantages and disadvantages of Partnerships.
24. What is the difference between general and limited partnerships?
25. Define Corporation. List the advantages and disadvantages of Corporations.
26. Define stock, shareholder, dividend.
27. Define Bond, Principal, and Interest.
28. Define Nonprofit Organization. Give an example.
29. Define Cooperatives. What are three types of cooperatives and give an example of each?
30. Define Labor Union. Give an Example
31. Define Professional Associations. Give an Example
Ch. 4
32. Define Demand.
33. Define Microeconomics.
34. Define Demand Schedule. See fig. 4.1 p. 90
35. Define Demand Curve. See fig. 4.1 p. 90
36. What does the law of demand state?
37. Define Diminishing Marginal Utility. Give an example.
38. Define Change in quantity demanded. See fig. 4.3 p. 96
39. Define Income Effect. Give an example.
40. Define Substitution Effect. Give an example.
41. Define Change in demand. See fig. 4.4 p. 98
42. List six reasons why the demand curve could shift right or left.
43. Define Elasticity.
44. Define Demand Elasticity.
45. What are the characteristics of Elastic Demand? Give an example.
46. What are the characteristics of Inelastic Demand? Give an example.
Ch. 5
47. Define Supply.
48. What does the Law of Supply state?
49. Define Supply schedule. See fig. 5.1 p. 114
50. Define Supply Curve. See fig. 5.1 p. 114
51. Define Quantity Supplied.
52. Explain Change in Quantity supplied. Give an example.
53. Define Change in Supply.
54. When will the supply curve shift to the right? To the left?
55. List seven reasons why the supply curve could shift left or right.
56. Define Supply Elasticity.
57. Define Elastic Supply.
58. Define Inelastic Supply.
59. What are the characteristics of Elastic Supply? Give an example
60. What are the characteristics of Inelastic Supply? Give an example
61. List seven reasons why the supply curve could shift left or right.
Ch. 6
62. Define Price.
63. Prices perform the allocation function very well for what reasons?
64. In a market economy a low price is a signal for what?
65. In a market economy a high price is a signal for what?
66. Economists think of prices as a system for what reasons?
67. Define Market Equilibrium.
68. Define Surplus.
69. Define Shortage.
70. Define Equilibrium Price.
71. If there is a shortage in a market, the price is likely to do what?
72. If there is a surplus in a market, the price is likely to do what?
73. Define Price Ceiling. Give an example.
74. Define Price Floor. Give an example.
Ch. 7
75. Define Laissez-Faire.
76. Define Market Structure.
77. What four different market structures do economists group industries?
78. Define Perfect Competition. Give an example.
79. What are the five major conditions that characterize perfectly competitive markets?
80. Define Monopolistic Competition. Give an example.
81. Define Oligopoly. Give an example.
82. Define Monopoly. Give an example.
83. What are the different types of monopolies, define them, and give an example of each type.
84. Define externality.
85. Explain the difference between a negative externality and a positive externality and give an
example of each.
86. Define Public Good. Give an example.
Ch. 8
87. Define Macroeconomics.
88. Define Civilian labor force. What does this not include?
89. What are two types of unions? Define each and give examples of each.
90. What are four major categories of labor? Define each category and give an example.
91. Define Traditional Theory of Wage Determination.
92. Define Theory of Negotiated Wages.
93. Define Signaling Theory.
94. Define Labor Mobility.
95. Define Minimum Wage.
Ch. 9
96. List four ways taxes impact the economy.
97. List the three types of taxes and define each one.
98. What is the most important Federal Income Tax?
99. How is the income tax paid? Define the payroll withholding system to answer this question.
100.Define the Internal Revenue Service (IRS).
101.Define Tax Return.
102.Define FICA.
103.Define Medicare.
104. Define and give an example of Excise Tax, Estate Tax, Gift Tax, Customs Duty, User Fees.
105. What is the largest source of state revenue? Define this word.
106. What is the second source of state revenue?
107. What is the second largest source of local taxes?
Ch. 10
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Define Federal Budget.
What is the difference between mandatory and discretionary spending?
Define Fiscal Year. When does the government’s fiscal year start and expire?
What is the difference between a federal budget deficit and a federal budget surplus?
Define Deficit Spending.
Define Federal Debt.
Define Balanced Budget.
As of 9-26-05 what is the National Debt?
Ch. 11
116.Define Money.
117.List three functions of money and define each.
118.What is the difference between commodity money and fiat money?
119.List four characteristics of money.
120.Define Federal Reserve System.
121.Define Savings Bank. (look in glossary)
122.Define Savings and Loan Associations
123.Define Credit Unions.
124.What are NOW and Share Draft Accounts?
Ch. 12
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How can saving money make economic growth possible?
How much money does the FDIC insure today?
Define Finance Company.
Define Bill Consolidation.
Define Life Insurance
Define Mutual Fund.
Define Pension and Pension Fund.
Define IRA.
List two ways you can invest your money other than in the stock market and retirement
plans.
What are two ways you can purchase stock?
List two stock exchanges.
What is the Dow?
What is the difference between the bear and bull markets?
What is the OTC?
What is the most important OTC market? Briefly define it.
Ch. 13
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Define Gross Domestic Product.
Define National Income Accounting.
How do we compute GDP?
What things are excluded in GDP?
What is the best measure of the nation’s income? Define this word.
What are five measures included in the National Income and Product Accounts (NIPA)?
Define the Output-expenditure model. What is the equation used?
What are the Economic Sectors of the economy?
Define Inflation.
Define Price Index.
How do we construct a price index? See fig. 13.4 p. 351
What are the major price indices and define each one?
What is the formula for converting GDP to Real Dollars?
How does economic growth benefit a country?
Ch. 14
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Define business cycles.
Explain the phases of the business cycle. Define Peak, Trough, and Depression.
Define unemployed.
What are 5 types of unemployment and give an example of each?
What constitutes full employment?
What are three degrees of inflation and define each one?
What are causes of inflation and explain each one?
What are the consequences of inflation?
Ch. 15
162.Define currency.
163.Define coins.
164.Define Monetary Policy
165.Define Reserve Requirement.
166.Define legal reserves.
167.Define excess reserves.
168.Define Easy Money Policy.
169.Define Tight Money Policy.
170.Define Discount Rate.
Ch. 16
171.Define fiscal policy.
172.Define Keynesian Economics
173.Define Supply-side economics.
174.Define Multiplier Effect.
Ch. 17
175.Define exports.
176.Define Imports.
177.Define absolute advantage.
178.Define comparative advantage
179.Define International Trade.
180.Define tariff.
181.What is the World Trade Organization?
182.What is the North American Free Trade Agreement?
183.Define foreign exchange rate.
Ch. 18
184.Define Capitalism.
185. What are advantages and disadvantages of Capitalism?
186. Define Socialism.
187.What are advantages and disadvantage of socialism?
188.Define Communism.
189.What are some characteristics of Communism?
190. What are the disadvantages of Communism?
191.What are some problems of transition from Communism to Capitalism?
Ch. 19
192. Define Developing Countries.
193.Define life expectancy.
194.Define Zero Population Growth.
195.Define European Union.
196.Define OPEC.