Economics Final Exam Fall 2003

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Economics Final Exam Fall 2003 Powered By Docstoc
          MR. MILEWSKI
          SPRING 2004
          Ladies and Gentlemen, this is it. This is your review sheet for the final exam. You will have all day in
          class Monday June 7th , Tuesday June 8th , and Wednesday June 9th to work on this review in class.
          Please note the following items listed below that relate to this sheet and the final days of the semester:

              1.) The Final Exam is cumulative. Everything on this sheet we covered this semester and is fair
              game for the final exam.
              2.) The Final Exam is all multiple choice. The number of multiple questions has yet to be
              determined. Right now plan on between 80 and 100 questions.
              3.) The Final Exam will be given on: Thursday June 10, 2004 for hours 1,2,&3 and on Friday June
              11, 2004 for 4th hour. There will be NO early final exams given!
              4.) This review sheet will NOT be collected. I am NOT going to collect this review, but if you
              complete it before the test you CAN:
                       Attend the extra review secession for the final exam. ONLY students who are on time
                          and have a completed review sheet will be allowed to attend. (Review sheets will be
                          checked at the door and late arrivals will NOT be admitted.) The extra review secession
                          will be as follows:
                               o Wednesday June 9, 2004 from 2:35-3:05pm
                               o Thursday June 10, 2004 from 7:00-7:35am
                          Completed review sheets may also be turned in immediately before the test for 100
                           points. These 100 points are NOT extra credit points, but they WILL boost your grade.
                           Incomplete review sheets will NOT be awarded ANY points. (If you do not complete
                           and turn in the review sheet it will NOT harm your grade because no zero will be
              5.) Textbooks MUST be turned in on Wednesday June 9, 2004. Students who have lost their
              textbooks MUST pay the $60.00 replacement fee by 8:00am Monday June 14, 2004 to the Crestwood
              Social Studies Department. If the textbook is NOT returned and the fine is NOT paid by this date an
              incomplete for the class will be recorded on your report card.
              6.) I will answer questions on this review sheet. If you have any questions over the weekend
              please e-mail me at: I will check my e-mail several times over the
              weekend. After Monday I will be available during class all day on Monday, Tuesday, and
              Wednesday. I will also be available in person before and after school on Monday and Tuesday. I will
              also be available before school on Wednesday.

Know the following terms:
Bull market
Absolute advantage
Fixed exchange rate
Real GDP

Please Note:
The following questions will be found in a True/False section on the final exam. It would behoove you to not only
know whether each statement is T or F, but why that is so.

The entrepreneur organizes land, capital, and labor for production in hopes of earning a profit.
A demand curve illustrates the quantity demanded at all possible prices at a given time.

The consumer sector is the largest part of the macroeconomy.
One effect of tariffs and quotas is higher prices on domestic products.
The foreign exchange rate is the price of one country's currency in terms of another country's currency.
When President Nixon refused to redeem foreign-held dollars for gold in 1971, the world went from a fixed exchange
rate to a floating exchange rate.
When the dollar falls in relation to foreign currencies, American consumers can buy imported goods more cheaply.

When more suppliers enter the market, the market supply will typically decline.
The Law of Supply states that suppliers will normally offer less for sale at higher prices and more for sale at lower
An increase in the cost of inputs can cause the supply curve to shift to the left.
The supply curve is likely to be elastic for products that can be made quickly without huge amounts of capital and
skilled labor.
The introduction of technology usually has no effect on supply.
High returns on investments are usually associated with low risks.
The American Stock Exchange is the oldest, largest, and most prestigious of the organized stock exchanges in the
United States.
The S&P 500 reports on stocks listed on the NYSE, AMEX, and OTC markets.
The decennial census is mandated by the U.S. Constitution to determine the number of representatives each state
elects to Congress.
Increasing labor productivity helps promote economic growth and raise living standards.

Please Note:
The questions found below will be part of the multiple choice section of the final exam.
What is the purpose of government in a command economy?

            ECONOMICS                                                                                                   2
            MR. MILEWSKI
            SPRING 2004
T or F: The former Soviet Union is an example of a market economy.

What group of people ultimately determines the products that a free enterprise economy produces?

What term best describes the type of economy found in the United States?

What are the characteristics of a command economy?

What are the characteristics a market economy?

Why is the minimum wage is an example of a federal law that supports economic equity?

What is the concept of voluntary exchange?

What is the government's role in a mixed economy?

For most products and services, what results when prices increase?

An increase in the price of milk causes a decrease in the demand for cereal. The two products are

How does advertising, fashion trends, and new product introductions affect consumer demand?

A modest price increase has little or no effect, the demand for the product is ____________.

T or F: A business doubled the price of a product in order to increase profits, but it backfired and caused a dramatic
decline in revenues because the demand for the product was elastic.

What does a demand schedule show?

A consumers' willingness to replace a costly item with a less costly item is an example of ______________.

            ECONOMICS                                                                                                    3
            MR. MILEWSKI
            SPRING 2004
An increase in the price of cameras results in a decrease in the demand for film. The two products are ____________.

When a customer's need for a product is not urgent, demand tends to be ______________.

When a manufacturer of pain medication reduced the price of the medication by 30%, profits declined by almost
exactly 30%. Demand for the product is __________________.

What factors can cause a change the market supply curve?

T or F: The supply of a product normally decreases if taxes on the product increase.

T or F: Rent control is an example of a price ceiling.

What do price ceilings that are artificially low create?

What do price floors that are artificially high create?

What has occurred to the supply curve when producers offer fewer products for sale at each and every price?

Who came up with the concept of the invisible hand?

In a market economy, a high price is a signal for ______________________________________.

At a given price, a surplus occurs when _____________________________________________.

T OR F: Federal minimum wage law demonstrates a societal choice for economic equity over efficiency.

How do prices enable a market economy to adjust to unexpected events?

What are the characteristics of allocation by rationing?

            ECONOMICS                                                                                              4
            MR. MILEWSKI
            SPRING 2004
What happens when a competitive market is at equilibrium, and there is a sudden increase in demand?

What is the theory of competitive pricing?

What are the characteristics of perfect competition?

A monopoly that is based on the ownership or control of a manufacturing method, process, or other scientific advance
is a ___________________ monopoly.

What can a decrease in competition within an industry result in?

What did the Sherman Antitrust Act do?

What are the reasons for the government to be involved in the U.S. economy?

What are the characteristics of perfect competition?

What will other car makers probably do when a major car company lowers its prices?

What do mergers and acquisitions result in?

What did the Clayton Antitrust Act do in regard to prices?

T or F: Indirectly, the government has improved the quality of information available to consumers through its support
for the internet.

T or F: A nonbank financial intermediary that primarily makes loans to construction companies for building homes is
a real estate investment trust.

What type of risk do Junk bonds carry?

What does the Efficient Market Hypothesis argue?

            ECONOMICS                                                                                              5
            MR. MILEWSKI
            SPRING 2004
What street is the NYSE found on?

What sectors of the economy are the largest borrowers?

How do bonds work? What type of risk do they carry?

What type of risk do Municipal bonds, or munis, carry?

Where are most stocks in the United States are traded?

What is Karl Marx best remembered for? Hint: It has nothing to do with the beard

How is Gross Domestic Product determined?

T or F: The consumer Price Index is an index that reports on price changes for about 90,000 goods and services.

The census is taken every ______ years.

Baby boomers are those people born between ___________ and _____________. (Hint: WWII)

How does economic growth benefit the government?

What is the largest sector of the macroeconomy?

T or F: An index of average level of prices for all goods and services in the economy is the implicit GDP price

Since the colonial period, what has the U.S. census has revealed?

What are the benefits of long-term economic growth?

            ECONOMICS                                                                                             6
            MR. MILEWSKI
            SPRING 2004
What effect do tariffs and quotas can have?

What did the Smoot-Hawley Tariff of 1930 resulted in?

What is the international agency that administers trade agreements and settles trade disputes called?

What is the purpose of a protective tariff?

Under the fixed exchange rate, the value of a country's currency is determined by ______________________.

What has been the recent trend between the value of the U.S. dollar and the value of the Euro?

Where does the basis for international trade stem from?

What does the United States import in dollar amounts each year?

What is the proof that international trade is beneficial?

What is the ability of a country to produce more of a given product called?

What is the ability of a country to produce a good at a relatively lower opportunity cost called?

What are the means to restrict international trade?

What is the most frequent argument used to support trade barriers?

What were the direct results of the 1930 Smoot-Hawley Tariff?

In recent years international trade has been ____________.

Why is foreign exchange necessary in international trade?

            ECONOMICS                                                                                       7
            MR. MILEWSKI
            SPRING 2004
For most of the 1900s, the world depended on what type of exchange rates?

What problem is most directly associated with a trade deficit?

How do most economists view trade deficits as today?

            ECONOMICS                                                       8
            MR. MILEWSKI
            SPRING 2004

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