Final Exam Review Unit One: Economic Questions Chpts. 1, 2, 16, 17 Scarcity Opportunity costs Production Possibility Curve Factors of Production/ Economic Resources Sunk Costs, social costs and social benefits Scarcity leads to…specialization, division of labor, social interdependence, global interdependence, Capitalism, Communism/Socialism, Mercanitilism Traditional, Command, Market Economies Mixed Economies Problems in the third world Unit Two: The Market Economy Chpts. 3, 4, 5 Demand Types of goods Shifts in demand Changes in the quantity demanded PPINE Price elasticity of demand Normal, Inferior, Substitute and Complementary goods Utility Diminishing Marginal Utility (or Returns) Total Revenue Test Supply Shifts in Supply Changes in the quantity supplied PGTENT Price Elasticity of Supply Diminishing Marginal Product Profit Motive Equilibrium Price Shortages, surpluses Price ceiling and floors Total Cost Marginal Cost Fixed Cost Marginal Product Unit Three: Competition Chpts. 6, 7, 8, 18 Types of Businesses: sole proprietor, partnerships, corporations Pros and cons of all of these Models of Competition: perfect competition, monopolistic competition, oligopoly, monopoly Supply and demand in the labor market Monopsony Labor Unions (closed shop, open shop, union shop) Minimum Wage NMAL or N. D.P. Issues about Globalism Outsourcing Trade deficit Trade surplus Balance of Trade Absolute Advantage Comparative Advantage Macroeconomics Chpts. 10, 11 Aggregate Supply and demand Four reasons for a shift in aggregate supply, and four reasons for a shift in aggregate demand Supply shock Complete Circular Flow of Money and Products GDP = C + I + G + (x-m) Real GDP Inflation (cost-push and demand-pull) Stagflation Income: personal distribution, functional distribution, per capita Poverty Lorenz Curve Gini Index Philips Curve Laffer Curve Types of Unemployment Fiscal Policy Chpts. 12, 15 Roles of the Government Taxation (justifications, types of taxes, specific taxes) Budgets deficits & debt Demand-side economics (John Maynard Keynse) Supply Side Economics (Jean-Baptiste Say) Montarists Monetary Policy Chpts. 13, 14 Role of the Federal Reserve System Money Banking Easy-money and tight money policies Reserve Requirements Discount Rates Open-Market Operations Graphs: Microeconomic supply and demand Price ceilings and floors Surpluses and shortages Labor Market Graphs Minimum Wage graph Aggregate supply and demand graphs Lorenz curve Gini Index Philips Curve Laffer Curve Formulas: Elasticity of demand Marginal costs