Economics CP: Final Exam Review



Economics CP: Final Exam Review

Basics

1. Economics

2. Microeconomics versus Macroeconomics

3. Scarcity

4. Opportunity Cost

5. Incentives

6. Goods versus Services

7. Four Factors of Production (list and define)

8. Circular Flow Model (draw and label)

9. Market

10. Three Economic Questions

11. Market versus Command Economies

12. Mixed Economy

13. Standard of Living

Characteristics of High Standard of Living:

Characteristics of Low Standard of Living:

PPF +

1. PPF (what does it stand for?)

2. Graph and label PPF (think links and smiles)

Label- An efficient point (A)

An inefficient point (B)

An unattainable point (C)

3. Absolute Advantage

4. Comparative Advantage

Supply and Demand

1. Law of Demand versus Law of Supply

2. Determinants of demand

3. Determinants of supply

4. Complement versus Substitute

5. Change in Demand versus Change in Quantity Demanded

6. Equilibrium Price versus Equilibrium Quantity (show it graphically)

7. Elastic versus Inelastic Demand

8. Price Floor (graph, define, and effect of)

9. Price Ceiling (graph, define, and effect of)

10. Black Markets

11. Graph S and D. Label equilibrium P and Q

Economic Indicators +

1. GDP (what stand for?, define, formula)

2. Business Cycle (graph and label)

3. Characteristics of a Recession

Characteristics of an Expansion

4. Unemployment

Frictional

Structural

Cyclical

Seasonal

5. Labor Force

6. CPI (stand for?, define)

7. Externalities

Examples of positive:

Examples of negative:

Business and Labor

1. Sole Proprietorship

2. Partnership

3. Corporation

4. Dividends

5. Stockholders

6. Double Taxation

7. Unlimited Liability

8. Labor Union

Market Structures

1. List the Four Market Structures and Major Characteristics of Each

Name # of Firms Product Differentiation? Examples

2. Fixed versus Variable Costs/Resources

3. Law of Diminishing Marginal Returns/Benefits

4. Marginal Analysis

Fiscal Policy

1. Fiscal Policy

2. Supply-Side Economics

3. Demand-side Economics

4. Laissez-Faire Economics

5. Adam Smith

6. Deficit Versus Debt

7. Surplus

8. Balanced Budget

9. Revenue versus Expenditure

10. Progressive Tax

11. Greatest Federal Discretionary Spending

12. Greatest Federal Mandatory Spending

13. Greatest Source of Federal Revenue

14. Greatest State Expenditure

Monetary Policy

1. Monetary Policy

2. Money

3. Inflation

4. Federal Reserve System (basic structure)

5. Fed Chairman

6. Tools of Monetary Policy

a. How should the Fed use its 3 tools during a recession?

b. How should the Fed use its 3 tools during a period of expansion and inflation?

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