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Answers and questions to help you pass the econ final.
Demand and Market demand Schedule:
Supply and Market Supply Schedule:
Show effect of elasticity and relationship to total revenue:
As the price is lowered...total revenue rises.
As the price is raised ...total revenue falls
As the price is lowered...Total revenue falls
As the price is raised...total revenue rises.
3 factors of production:
Land, labor, and capital.
2 types of capital:
Human and Physical
How do resources and technology relate?
Improvements in technology allow an economy to produce more output from the same or smaller quantity of inputs, or resources.
2 advantages of Free Market:
4 problems of a command economy:
Poor quality of goods
Lack of choices
List the basics of free enterprise
Whats the 3 roll's of the government in free market?
3 outcomes policy makers try to reach in economy
what is technology progress in economy and how is it important?
what are 4 types of cash transfers?
1. social security
what are 2 types of in-kind benefits?
1. Food Stamps
What are 2 types of health insurance provided by the US and what are the differences?
1. Medicare - used for the elderly
2. Madicade - used for low income person
State the Law of Demand
Consumers buy more of a good when its price decreases and Less of a good when the price increases.
Causes of the demand curve:
2 factors that effect elasticity:
Was the first bank successful in bringing order?
no, it didn't last long
1 issue that was caused by free banking:
2 issues in banking during the depression:
1. You couldn't pay back loans
What was one thing that Roosevelt did when he reformed the banks?
what are 2 functions of financial institutions?
1. Issue loans
2. Store money
what are 2 types of financial institutions?
1. Commercial banks
2. Savings Banks
what are 4 categories of final goods and services for the expenditure aproach?
what are 2 things not acounted for GDP?
What are 4 phases of the business cycle?
what are the levels of severity during a contraction?
recession, depression, stagflation
what are 2 examples of financial intermediaries?
2. Credit Unions
What are 3 components of Bonds?
1. coupon rate
2. par value
what are 5 types of bonds?
why was buying stocks on margin an issue?
what is the danger of speculation?
what is inflation? and its effect on purchasing power?
people on fixed incomes are more effected by it.
what are 2 limits on power to tax?
1. you can't tax exports
2. you can't tax in between states
what are 2 characteristics of good tax?
what are 4 causes of poverty?
1. lack of education
2. lack of skill
3. cultural or racial backgrounds
4. change in household
what are the 3 causes of inflation?
1. demand pool
2. cost push
3. raise spiral
What is price healing and price floor?
graph rent control:
list the positive and negative things
Graph minimum wage:
how can you tell if minimum wage is above or below equalibrium?
if its above then there are more workers.
what are 3 advantages of price?
2. price incentive
what is the black market?
its were goods are bought and sold illegaly
what is the law of supply? and what are 2 things combined to make it?
Law of supply is the tendency of suppliers to offer more of a good at a hire price.
relationship between elasticity and time
what is fixed cost and veriable cost?
: doesn't change
: goes up or down
what is the effect on input cost on supply?
what are 3 government influences on supply?
what is the level of price control for perfect competition?
there is no price control
what are 4 conditions of perfect competetion?
1. many buyers and sellers participate in the market
2. sellers offer identical products
3. buyers and sellers are well informed about products
4. sellers are able to enter and exit the market freely
what are 2 examples of bariers to entry?
1. start up costs
what is a monopoly?
when all the markets are owned and controlled by one person
what is an oligopoly?
when the market is controlled by a few large firms
what are 3 conditions that have to be in place for price descrimination to work?
1. some market power
2. distinct customer groups
3. difficult resale
what are 2 conditions of monopolistic competition?
1. many firms
2. few artificial barriers to entry
what are 2 forms of non-price competition?
1. physical characteristics
what are 3 practices of ologopolies that concern government?
1. predator pricing
2. bariers to entry
what are cartels?
they are a form of organization of producers that agree to coordinate prices and production.
what are 2 industries that were deregulated in the 70's and 80's?
the airline industry and banking industry
what are the 4 types of unemployment?
what are 2 examples of mandatory spending?
1. social security
what are 2 descresionary spendings?
2. scientific research
what are 2 types of budgets that states have?
1. operating budgets
2. capital budgets
what are 3 limits of fiscal policies?
1. difficulty of changing speding levels
2. predicting the future
3. delayed results
what are 2 examples of automatic stabilizers?
what role did the government have in economy in Keyne's view?
their role was spending
what happened with government spending with Regan, Bush and Clinton?
their spending went up
what tax cuts did Kennedy propose? did it work?
what did the laffner curve do?
shows that increasing tax rates beyond a certain point makes it harder to raise further tax revinue.
what were WWII ideas?
why is creating money an issue?
because it leads to extremely high inflation
Who is national debt owned by?
2. US investers
what is the difference between deficits and debts?
debt is a total of all deficits
what are 3 limits of fiscal policy?
1. delayed results
3. predicting the future
what are 3 sectors of keynesian theory?
show the change in CD market:
what are 3 advantages of a sole proprietorship?
1. ease of start up
2. full control
3. sole receiver of profit
what are 3 disadvantages of a sole proprietorship?
1. completely liable
2. not much resources
3. lack of permanence
what are 2 advantages of a partnership?
1. ease of start up
2. shared decision making/ specialization
what are 2 disadvantages of a partnership?
1. unlimited liability
2. potential for conflict
what are 2 advantages of incorporation?
1. Low liability due to cooporate veil
2. transferable info
what are 2 disadvantages of incorporation?
1. expensive start up
2. requirements and regulations
what are 3 advantages of franchizes?
1. built in reputation
2. standardized quality
3. good managment and training
what are 3 types of mergers?
what are 3 disadvantages of franchises?
1. expensive to start up
2. strict guidelines
3. limited product line
what are 3 main catagories of cooperative consumers?
2. service cooperative
what are 3 requirements for someone to be employed?
1. they would have had to work atleast one hour pay in the last week
2. worked 15 or more hours without pay in a family business or farm
3. held jobs but did not work due to illness, labor disputes or bad weather.
what is a full time student employed?
what is the shift of US economy from manufaturing to the service industry?
our prodution of services is increasing faster than our production of goods.
: financial services, online services, healthcare and desktop publishing.
what are 5 examples of the shift in the labor force in the 1960's?
30% of women were in the work force, in 2010 there are 62.2%
what are 2 benefits to temp employees?
1. easier to fire
2. usually paid less
what happened to the cost of workers?
the cost of benefits went up
what are 4 catagories of skill levels?
2. semi skilled
what are 2 factors that effect the number of jobs people are willing to do?
what are 4 elements of collective bargaining?
1. wages and benefits
2. working conditions
3. job security
what is the difference between mediation and arbitration?
Mediation- is when a neutral mediator meets at both sides to find a solution.
Arbitration- is when a 3rd party reviews the cass and imposes a decision when legaly binding for both sides.
what are 3 uses of money?
1. medium of exchange
2. unit of account
3. store value
what are 3 characteristics of money?
What are the 3 sources of money's value?
2. representative money
3. fiat money
What are the 2 views on banking?
1. The federalists who were lead by Jefferson supported the central banking system.
2. the anti-federalists who were lead by Hamilton and they supported the state banking system.