EconomicsMaster Study Guide

1. Defines scarcity2. Define allocation3. What are the four productive resources or factors of production?4. Explain the productive resource land5. Explain the productive resource labor (human resources)?6. Explain the productive resource capital (physical capital)?7. Explain the productive resource entrepreneur8. What is an example of investments in equipment and technology?9. What is an example of investments in human capital?10. Define standard of living11. Define opportunity cost12. What are 4 incentives for entrepreneurs to take business risks?13. Define marginal cost14. Define marginal benefit15. When are rational decision made?16. Define productivity

Use the production possibility cure to answer questions 17-20

17. Which of the following letters represent efficient trade-offs?18. Which of the following letters represent inefficient use of resources?19. Which of the following letters represent efficient use of resources?20. Using the Production Possibility Curve, which of the following letters represent unattainable use of resources?

Use the production possibility cure to answer questions 21-22

21. What is the opportunity cost when you pick letter A instead of letter B? 22. What is the opportunity cost when you pick letter B instead of letter A? 23. What leads to economic growth on the Production Possibility Curve?24. What kinds of investments can lead to economic growth?

25. Explain specialization26. What is an example of division of labor?27. Explain voluntary non-fraudulent exchange28. What are the three basic economic questions? 29. Describe a traditional economy30. Describe a command economy31. Describe a market economy32. Describe a mixed economy33. What are the four roles of government in the United States economy?34. What are examples of a public good?35. Explain redistribution of income36. Explain property rights?37. What is an example of government resolving a market failure?38. Define government regulation?39. Which of the following best defines government deregulation?40. What are the eight social and economic goals that nations try to meet?41. What are the nine strategies for allocating scarce resources?42. Define interest 43. What are 4 types of financial institutions? 44. Explain interest charged on loan?45. Explain interest earned on deposit?46. Why are interest rate charged by financial institutions different from the interest rate paid by financial institutions to

depositors?47. What financial services are offered by banks? 48. What financial services are offered by credit unions?49. What financial services are offered by payday lenders?50. What financial services are offered by title pawn lenders? 51. Why do financial institutions charge different interest rates on different types of loans? 52. What are 5 savings and investment options?53. Explain U.S. Treasury bond? 54. Explain certificate of deposit55. Explain stocks56. Explain mutual funds57. What savings and investment options have low risk and low returns? 58. What savings and investment options have high risk and high returns? 59. What is the relationship between risk vs return investments? 60. Define inflation61. Who is hurt by unanticipated inflation? 62. Who benefits from unanticipated inflation? 63. Define credit worthiness64. What factors that influence an individual’s credit score (THREE C’s of Credit) 65. Define annual percentage rate (ARP)66. Define simple interest67. Define compound interest68. Do consumer prefers to have a savings account that pays compound interest rather than simple interest? 69. Which of the following best explains fixed and variable interest rates? 70. How does the amount of deductibles impact the cost of premiums? 71. What are 4 types of insurance? 72. Why do people buy insurance? 73. What is the difference between a premium and a deductible?74. What are ways in which a worker can improve his/her earnings?75. What is the relationship between education and future earnings?

76. Explain and give an example of a progressive tax? 77. Explain and give an example of a regressive tax?78. Explain and give an example of a proportional tax? 79. Why is a sales tax a regressive tax? 80. How does property taxes impact individuals and communities? 81. Define microeconomics82. Define macroeconomics83. Explain the product market84. Explain the factor or resource market?85. Explain the circular flow of goods and services?

Use the following chart to answer questions 86-89.

86. Which of the following represents letter A?87. Which of the following represents letter B?88. Which of the following represents letter C?89. Which of the following represents letter D?90. Define the law of supply91. Define the law of demand92. Explain market clearing price or equilibrium price93. Explain change in quantity demand/supply94. Explain change in demand/supply?

Use the following chart to answer questions 95 and 96.

Graph A Graph B

95. Which of the above graphs is a change in quantity demanded?96. Which of the above graphs is a change in demand?97. What are the 6 determinants or factors that cause supply to shift?98. What are the 5 determinants or factors that cause demand to shift?99. What is an example of a complementary good?100. What is an example of a substitute good?

Use the following chart to answer questions 101-104.

Graph A Graph B

101. Which of the above graphs shows an increase in quantity supplied, decrease in price, and increase in supply?102. Which graph shows a decrease in quantity supplied, increase in price, and decrease in supply?103. Which of the above graphs shows what will happen to the supply of U.S. Cars if nationwide auto workers go on

strike?104. Which of the above graphs shows what will happen to the supply of U.S. Cars if the cost of Steel decreases?

Use the following chart to answer questions 105-107.

Graph A Graph B

105. Which of the above graphs shows what will happen to the demand for U.S. cars if consumer’s income decreases?106. Which of the above graphs shows what will happen to the demand for U.S. cars if the price of foreign cars

increases?107. Which of the above graphs shows what will happen to the demand for U.S. cars if the price of gas decreases? 108. Which of the following best explains a price floor?109. Which of the following best explains a price ceiling?110. What do government price ceilings create?111. What do government price floors create?

Use the following chart to answer questions 112-113.

Graph A Graph B

112. Which the above graphs best represents a price ceiling?113. Which of the above graphs best represents a price floor?114. What are the three types of business organizations?115. Explain a sole proprietorship116. Explain a partnership117. Explain a corporation118. What are the four types of market structures?119. Explains a monopoly120. Explain an oligopoly121. Explain a monopolistic competition122. Explain a pure (perfect) competition

Use the following chart to answer questions 123-126.

Types of Markets Advertising Barriers to Enter Market

Control over Prices

Types of Products

Market ANone All most impossible Complete Unique, no

substitute

Market BMuch Difficult Some Some differences in

products

Market CMuch Fairly easy Little Similar but

different

Market DNone None None Similar or identical

123. Which type of market structure is represented by Market A?124. Which type of market structure is represented by Market B?125. Which type of market structure is represented by Market C?126. Which type of market structure is represented by Market D?127. Explain macroeconomics128. What are the three goals of macroeconomics?129. Explain Gross Domestic Production130. What is the equation for Gross Domestic Production?

131. Explain Consumer Price Index (CPI)132. What type of economic activity is measures using changes in CPI?133. Explain inflation134. Explain real GDP?135. Explain aggregate supply136. Explain aggregate demand137. What is the equation for unemployment rate?138. List the four types of unemployment?

Use the following chart to answer questions 139 and 140.

Graph A Graph B

139. Which of the following shows a price level increase, real GDP Increase, and increase in aggregate demand?140. Which of the following shows a price level decrease, real GDP decrease, and decrease in aggregate demand?141. Explain cyclical unemployment142. Explain structural unemployment143. Explain frictional unemployment144. Explain seasonal unemployment145. Identify the 3 roles and functions of money146. Explain medium of exchange?147. Explain store of value?148. Explain unit of account/standard of value?

Use the following chart to answer questions 149-152.

149. Which of the following best describes letter A?150. Which of the following best describes letter B?151. Which of the following best describes letter C?152. Which of the following best describes letter D?153. Explains the Federal Reserve System154. What is the significance of the Federal Open Market Committee (FOMC)? 155. What is the significance of the Board of Governors? 156. Explain monetary policy?157. What are the three tools used by the Federal Reserve to implement monetary policy?158. Describe the reserve requirement?159. Describe the discount rate?160. Describe open market operations?161. Explain fiscal policy?162. Give examples of fiscal policy?163. Explain budget surplus?164. Explain budget deficit?165. Explain national debt?166. How does a government surplus impact national debt?167. How does a government deficit impact national debt?168. How does an increase in government taxing impact economic growth?169. How does an increase in government spending impact economic growth?170. Explain absolute advantage171. Explain comparative advantage172. Why does most trade take place between countries?173. Explain balance of trade174. Explain trade surplus175. Explain trade deficit176. What are the five barriers to trade177. Explain a tariffs178. Explain a quota179. Explain embargo180. Explain subsidy181. Explain standards182. Explain trading blocs183. What are three examples of trading blocs?184. What countries are part of NAFTA?185. What countries are part of ASEAN?186. What countries are part of the European Union?187. Which of the following are costs of free trade?188. Which of the following are benefits of free trade?189. Why does currency exchange occur?190. Describe currency appreciation?191. Describe currency depreciation