Economics Final Exam

Transcription

1 Economics Final Exam Study Guide Chapters 1,2,11 Study Guide Congratulations! You have been creating your very own study guide for the past three months from your outside reading of the text, your classroom notes from the PowerPoints and your classwork and homework. Put them to good use! Format Honors: Multiple Choice: There are 75 questions worth 1 point each (75 points total) Long responses: There are two extended responses worth 10 points each. You will have document based questions(reading passages) and possibly a cartoon, along with various graphs and charts. (9 points total). Make sure to look over your W.A.V.E. form, as well as the side readings we have done in class. There are two extended responses worth 12 points each. (16 points total). *********************************************************************************** You are responsible for the following content (This is not meant to be a complete and comprehensive list; rather, it is meant to highlight some of the more important things to know.) Please feel free to review your notes, homework and text. All of the vocabulary for each chapter Make use of the interactive review in classzone.com for both the vocabulary and the animations for the circular flow of economic activity, as well as the PPC. Know how it is possible for an economy to reach a new PPC. Know how to find the opportunity cost in a PPC problem. What is an economic model? What does the PPC measure?

2 Know the Law of Opportunity Cost so well that you can explain it in your own words. You should be able to describe the economic philosophies of Smith, Friedman and Marx. Know the differences between and the advantages and disadvantages for the three economic systems. What are the legal protections of free enterprise? Be able to describe the function of the government in economic activities circle. What are the advantages of chain stores over local businesses? Know your central concepts, such as opportunity cost, and traded offs, and be able to describe that relationship. Be able to define/describe what a transfer payment is, and give examples. Know what the financial markets are and how they work- their unique characteristics Be able to interpret graphing and recognize risk and reward elements in various situations Know bond terms par value, coupon, yield, etc. What are financial intermediaries? What do they do? Know examples. How are savings moved to investment? What are stocks? CDs? Format: There are 30 multiple- choice questions worth 2.5 points each, and two short response questions worth 4 points each. and two extended responses worth 8 points each. The short response questions involve the interpretation of visual (graphic) data and analysis of editorial commentary. Total: 100 points From Chapter 11: Please carefully review the following: Financial intermediaries Know they types and what they do, banking and non- banking. How do they move money from saving to investing? The stock exchanges Where are the majority of stocks traded? Bond terminology- Know the vocabulary for bond terms

3 The financial markets Know the major divisions and categories. What are the advantages of government bonds? From Chapter 4: Section 1 Know the difference between a market demand curve and a demand curve Know the difference between a change in demand and a change in quantity demanded Section 2 Know the factors that affect or change demand. Look at graphic #412, Factors That Cause a Change in Demand, on page113. Carefully go over their explanations and examples for each term. See if you can come up with your examples. Section 3 Be able to identify or define elasticity, and inelasticity of demand. Be able to give examples for each. Graphing: Look at p.19 figures 4.8 and 4.9. You have to be able to answer questions such as number one and two. Analysis: Graphics- Make sure you review your handout on how to analyze a cartoon. Text reading- Remember anything you have to read and answer from, should be read carefully, then re- read. What is being asked? Be sure that you are supplying the right information. From Chapter 5:

4 1. What conclusion can you draw from this supply curve? A. Competition drove one of the restaurants out of business. B. An increase in the number of producers increased supply. C. A drop in input costs caused producers to increase supply. D. A drop in the number of producers decreased supply. 2. Why is it important for producers to be able to determine their profit-maximizing output? Think About: - what motivates producers - the difference between costs and revenues - changes in marginal cost 3. On curve S1, what happens when price changes from $1.50 to $3.00? 4. On curve S1, what happens when price changes from $3.00 to $2.50? 5..On curve S2, what happens when price changes from $2.00 to $4.00? 6 What is the relationship between curve S1 and curve S2? 7. Which factor that affects supply is illustrated by this graph?

5 8 Which of the following is a fixed cost for a steel mill? A. Electricity runs stamping machines. B. Iron ore is purchased to make steel. C. Mill workers get paychecks. D. The chief financial officer is paid a salary. 9 Which of the following lists contain only variable costs for an automobile factory? A. building owner's insurance, plastic bumpers, wages B. electricity to run drills, wages, windshields C. electricity for fire alarm, tires, windshields D. building owner's insurance, plastic bumpers, windshields 10 What is the relationship between marginal revenue and total revenue? 11 Why do businesses want to know what their profit-maximizing output is? 12 The change in total output that results from hiring one additional worker is called 13 Business owners decide on the right number of workers by analyzing data to learn when 14 Total cost is the sum of: 15 Which of the following is an example of producer expectation affecting supply? A. On the Friday before a holiday weekend, gas stations raise prices by 20 percent. B. As gas prices rise, a frozen food maker reduces its long-distance shipments. C. As oil prices rise, a bicycle factory increases production levels. D. When gasoline prices rise, a trucking company switches to part-ethanol fuel. 16 Which producer will have the more elastic supply, a sweater factory or a woman who creates hand-knit sweaters? Explain your answer in detail. 17 If you are a manufacturer of herbal dietary supplements, what government actions might help you increase supply and what government actions might decrease your supply? 18 Within a six-month period, a boat factory experiences the following changes: the cost of fiberglass hulls goes down; robots are added to the assembly line; the government requires new safety features. How will each change affect the supply of boats and why? 19 Making Comparisons Martinique responds to a building boom and begins manufacturing bricks. She starts by hiring employees. How will she know when she has enough employees?

6 20 Determining Cause and Effect Name and explain two reasons why changes in supply occur. 21. Explain the three types of supply elasticity. What is the main determinant of supply elasticity? 22. Why do excise taxes and subsidies affect supply differently? Make sure to look over your factors of supply; elasticity of supply; and the production costs and revenue schedule on p.143. Know what the profit-maximizing output formula is. Be able to recognize it in a chart. Look over the Adam Smith reading from The Wealth of Nations (Division of Labor). Good luck!! From Chapter 6: Price ceiling price floor equilibrium rationing black market minimum wage equilibrium price From Chapter 7: UNIT 3- STUDY GUIDE What to study: Monopoly Oligopoly Types of monopolies Characteristics of monopolistic competition Characteristics of ogopolistic competition From Chapter 8: Horizontal and vertical mergers Sole proprietorships Types of Partnerships-

7 Advantages and disadvantages Oligopolies and their characteristics From Chapter 9: Insourcing and outsourcing. Know the examples Know the terms for bargaining involving unions. Know the types of union shops( closed,etc) Collective bargaining Binding arbitration mediation Taft Hartley Act Fair Labor Standards Act The Norris-LaGuardia Act Types of Unions unions Trades Unions Crafts unions From Chapter 10: commodity money fiat money near money representative money economic properties of money physical properties of money demand deposits barter system Be able to discuss insourcing and outsourcing Be able to discuss whether money is becoming more abstract BUT WAIT THERE S MORE!

8 From Chapter 12 The market value of all final goods and services produced within a nation in a given time period is called How did the Great Depression affect the thinking of John Maynard Keynes and other economists? GDP that is stated in the price levels for the year in which the GDP was measured is called From Chapter 15 what is the name for the use of government revenue and spending to try to stabilize the economy by influencing aggregate demand? From Chapter 17 The idea of comparative advantage was developed by hat countries gain when they produce items they are most efficient at producing and are at the lowest opportunity cost is called the Any law passed to limit free trade between nations is called a trade From Chapter 17 GOOD LUCK!