Econ Alive Study Guide Directions: After you put your Final Portfolio in order, go through it and using this Study Guide as a map, answer these questions to the best of your ability. If you find that you cannot reasonable answer the questions, go back to the book for further assistance. Good Luck! Chapter 1: 1. Economics is the study of what? 2. What is the system used to manage limited resources for the production, distribution, and consumption of goods? 3. What is an economic enigma? Give an example. 4. What is anything used to produce a good or a service called? 5. What is the economic theory that deals with the behavior and decision making by small units (individuals and firms)? 6. What is the economic theory that deals with the economy as a whole and decision making by large units (governments)? 7. What is the difference between positive and normative economics? 8. What is an enigma? 9. What is scarcity?
10. What are the Seven Principles of Economics? Be able to explain each! 11. What are the six steps to the scientific method? 12. What is a simplified representation that allows economists to understand how the world works? Chapter 2: 13. Why can t you always get what you want? 14. Define/describe what a good is? 15. Define/describe what a service is. 16. How do scarcity and shortages differ? 17. What are the four ( sometimes 5)factors of production? Write a summary and give an example for each one:
18. What is an input? 19. What is an output? 20. What is the difference between a trade-off and opportunity cost? 21. Explain utility. 22. What does the law of diminishing marginal utility tell us? 23. What is a PPC sometimes called a PPF? What does it show us? 24. What is the discussion regarding Guns Vs Butter really all about? Chapter 3: 25. What are the three fundamental questions that all economic systems must answer? 26. What are the six economic goals? Explain each. 27. What are the different types of economic systems?
28. What economics goals are important in each economic system? (Refer to chart on p.46) 29. How does the circular flow of economic activity work? 30. What are the key characteristics of the U.S. Economic system? Chapter 5: 31. What is demand? 32. What are the requirements two that create Demand please explain? 33. What is supply? 34. What are the requirements two that create Supply please explain? 35. What is the law of demand? 36. What is the law of supply? 37. Which direction indicates an increase in demand/supply? 38. Which direction indicates an increase in demand/supply? 39. What are the demand shifters? How are increase and decreases in demand represented on a graph?
40. What are the supply shifters? How are increase and decreases in supply represented on a graph? 41. What is demand elasticity and what factors influence it? Be able to give examples of products with elastic and inelastic demand. Chapter 6: 42. What is equilibrium? 43. Explain the difference of shortage and surplus: 44. What is a price ceiling? Price floor? 45. How does government intervention affect markets? 46. What is rationing? 47. What is a black market or illegal market? 48. How does a Black Market or illegal market typically arise? Chapter 7: 49. What is a market structure? 50. What are the conditions required for perfect competition to exist? 51. What is a monopoly? What are the characteristics of a monopoly?
52. What is a patent? What is a copyright? 53. Explain oligopoly: What are the characteristics of an oligopoly? 54. What is monopolistic competition? What are the characteristics of monopolistic competition? 55. What are the four ways companies engage in nonprice competition? 56. What is a market failure? 57. What is the difference between a positive and negative externality? 58. Explain the difference between a private and public good. Chapter 8: 59. What are the three functions of money? Explain each: 60. Explain each of the six characteristics of money. 61. What does it mean if money is fiat money? 62. What is the difference between a credit card and a debit card?
63. How does the banking system work? 64. What are the three types of deposits? Which has the most liquidity? Which has the most reward? 65. How do banks make a profit? 66. What is the Federal Reserve Bank? What are its roles? 67. Why should you save? 68. What is the main advantage of diversification (e.g. mutual funds) as an investment policy? 69. What is compound interest and how does it increase the rate at which your investment grows? 70. Which investment has the most risk/reward?