REVIEW ECONOMICS

1. Define the Law of Proportionality and give examples of how management might suffer from Diminishing Returns resultant from poor decision-making.

2. Discuss and exemplify the factors of production together with their corresponding incomes and how they lead to the accumulation of wealth.

3. Define and exemplify the concept of Opportunity-Cost.

4. List the several classical economic systems and then describe how the decision-making process is handled within each.

5. Define the Law of Supply and the Law of Demand together with how their interaction affect price in a market economy.

6. Discuss and exemplify the effects that price has upon a market economy.

7. List and exemplify at least four factors which affect demand.

8. Discuss at least three functions of price in a market economy. Give examples of each.

9. Discuss elastic and inelastic demand giving at least 2 examples of each.

10. Discuss the three stages of production, then incorporate the concept of marginal analysis as utilized by an entrepreneur.

11. Explain the basic economic questions that have to be answered by all organized societies. How are these questions answered in a market, controlled and traditional economies?

12. Discuss the allocating mechanisms (who gets what) that exists in a traditional, command, market, and mixed economies as it pertain to ice cream cones. Integrate the concepts of efficiency and equality into your commentary.

13. Discuss the Economic Problem. Discuss how interdependence at all levels can help solve the problem, using as many examples as you consider as necessary.

14. Discuss the three ways in which an individual can become involved in corporate financing; citing the advantages and disadvantages

15. Discuss the advantages and disadvantages of the corporation as a business enterprise as compared to a proprietorship, and a partnership.

16. Define Specialization. Discuss and exemplify the three types of specialization.

17. Compare and contrast the six major types of markets as to their affect on supply and consequently their affect on price. Give an example of each type of market.

18. Define each of the types of inflation. Give a present-day example of a product or service which has increased in price for each of the theories.

19. Discuss two advantages and 2 disadvantages of using a gold standard to back paper money.

20. List and discuss several non-financial intermediaries which transfer savings into investment.

21. Discuss and exemplify the various factors which lead to inflation.

22. Define Fiscal Policy. Exemplify at least two policies which might be utilized during a period of deflation and provide the rationale for said policies.

23. Define Consumer Price Index. What is its purpose? Correlate the concepts of base year and market basket with the calibration of the Consumer Price Index.

24. Discuss and exemplify the various types of unemployment found within our economy at any given time.

25. Discuss the circular flow of income in as much detail as possible. A diagram may be utilized.

26. Define GDP and GNP then note their differences.

27. Discuss the various phases of the Business Cycle exemplifying various characteristics of each individual phase.

28. Define Recession and Depression noting their differences. Cite various attempts that government has instituted to prevent depressions. Analyze the consequences of these actions.

29. List, discuss and exemplify the opportunity/cost decisions of at least 5 socio-economic goals of a society.

30. Discuss how a financial system works to transfer savings to investment.

31. List the several classical economic systems and then describe how the decision-making process is handled within each; then list advantages and disadvantages of each.

32. Define multinational; then discuss the advantages and disadvantages that are experienced by a host

33. Explain the basic economic questions that have to be answered by all organized societies

How are these questions answered in a market, controlled and traditional economies?

34.. Discuss the four major components of Capitalism.

35. Discuss the concept of production possibilities with regard to resource utilization..

36. List and discuss the four economic functions that are carried on in all economic system.

37. Define co-operative. discuss the various types; and how they benefit their participants.

38. Define conglomerate and multinational; then discuss the rational for their creation.

39. Define merger. Differentiate between a vertical and a horizontal merger.; then discuss the various advantages

that can be realized by a merger.

40 Define real flow, money flow, and circular flow within an economic system showing their interrelationship. A flow chart can be use to illustrate.

41. Discuss and exemplify the advantages (5) of price as an allocating mechanism.

42. What happens when the debt is monetized? Explain the inherent danger to the economy

43. Define and discuss Externalities as market failures. Exemplify both positive and negative externalities.

44. Define market failure. List and exemplify 5 instances when market failures occur.

45. Discuss in detail how a bank creates money based upon fractional reserves.

46. If the price of tobacco rises, what is apt to happen to the demand for Pipes? Why? What type of relationship exists between pipe tobacco and pipes? What will happen to the price of cigars? Why? What type of relationship exists between pipes and cigars?

47. List and discuss the various factors that contribute to an unequal distribution of income within our society.

48. Discuss in detail the priority order of what the fed would do with monetary policy to combat inflation.

50. Discuss the various goals that one might pursue in investing together with the type of investments

which would be appropriate for each goal.

51. List and discuss the various causes of Business Cycles.

52. List and discuss at least 5 causes of the Great Depression.

53. Define recession and depression. Discuss those factors that cause an economic downturn to evolve from a recession to a depression.

54. Define GDP then discuss some things not included in GDP and why they are not included. Finally differentiate GDP from GNP.

55. Define price ceiling and price floor – give examples of each – What is their intent? What are the consequences or impact upon a free market relative to supply.

56. List and discuss the 5 characteristics of a market under perfect competition.

57. List and discuss at least 5 regulatory commissions that have been established at the federal level together with their impact upon the American Free Enterprise system.

58. List and discuss the various types of monopolies that exist within our present-day economic system.

59. List and discuss the various pieces of federal legislation intended to preclude a restraint of trade (competition) within the American Free Enterprise system.

VOCABULARY

AFDC	equities	monetary policy	Recession
barter	externalities	monetizing the debt	rediscount rate
base year	factor markets	money wages	Regulation "q"
book value	FDIC	monopolistic competition	Regulation 'z"
business cycle	FED	monopsony	REIT
call option	FOMC	multinational	Roth IRA
capital expenditures	fiat money	mutual fund	scarcity
capital goods	fiscal policy	NASDAQ	securities
caveat emptor	frictional unemployment	NIMBY	shortage
CD	galloping inflation	normal price	specie
clientele	GDP	oligopoly	SSI
collusion	GDP price deflator	opportunity cost	stagflation
commodities	GNP	OTC	Standard and Poors
commodity money	gold standard	Output Expenditure Model	standard money
complimentary product	holding company	outside lag	standard of living
conglomerate	hyperinflation	overvalued	subsidy
CPI	inelastic demand	par value	substitution effect
cooperative	inside lag	patent	surplus
copyright	interlocking directorate	policy lag	sweat equity
coupon	IRA	poverty threshold	TANSTAAFL
deficiency payments	jingling money	PPI	technological unemployment
Depression	junk bonds	predatory pricing	thrift
diminishing marginal utility	legal tender	price ceiling	token money
discretionary income	Lorenz Curve	price floor	traditional IRA
dollar cost averaging	M1	price maker	transfer payments
dumping	marginal analysis	prime rate	undervalued
duopoly	marginal cost	producer price index	utility
durable goods	market basket	production possibilities	wage price spiral
economies of scale	market value	profit maximization	wealth
Efficient market hypothesis	maturity	proprietorship	WIC
elastic demand	Medicaid	put option	workfare
entrepreneur	merger	rationing	yield
equilibrium price	MEW	real wages