Economics 101

Mr. Lewis
Final Exam Review Sheet
A note for success on exams: This is an Economics course, use the
concepts, ideas and logic you have been exposed to in this class and your
grades will reflect the effort.
Material for Final Exam: This examination covers the material from
chapters 17-20 in the text. In addition to this material there will be questions
regarding material from the previous sections of the course.
Section I material: Adam Smith, incentives, , economics as a social
science, what how and for whom, trade-offs, scarcity, sunk cost,
marginal analysis, ceteris paribus, marginal cost, marginal benefit,
specialization, the ppf model, productive efficiency, economic growth,
the division of labor, opportunity cost, shortage (excess demand),
surplus (excess supply), the law of market forces, price as market
equalizer, market equilibrium, movements in both supply and demand,
competition, shifts in demand or supply, the Laws of Demand and
Supply, the time dimension of demand, normal and inferior goods,
factors that shift supply and demand, substitutes and complements in
production, substitutes and complements in consumption.

Section II material: Accounting, economic, and normal profit, short

run and long run production, total, marginal, and average product, the
law of decreasing returns, total cost, fixed cost, variable cost, average
costs, long run costs, (dis)economies of scale, long run average cost
curve, perfect competition, firms horizontal demand and marginal
revenue, profit maximizing output, loss minimization, shut down
decisions in the short and long run, shut down price, breakeven price,
long run market equilibrium, monopoly, price discrimination, the
monopolists marginal revenue curve, rent seeking, deadweight loss,
barriers to entry, monopolistic competition, long run outcomes,
oligopoly, collusion, possible outcomes.

Section III material: The definition of GDP, intermediate goods and

services, Real vs. Nominal GDP, the standard of living, potential GDP,
the phases of the business cycle, omissions from GDP, the workingage population, labor force, unemployment rate, labor force
participation rate, types of unemployment; frictional, structural,
cyclical, seasonal, full employment and the natural rate of
unemployment, unemployment and real GDP, the output gap, the
definition of the consumer price index, the inflation rate, inflation,
deflation, core inflation rate, nominal vs. real, wage, GDP .

Section IV material: Classical, Keynesian, and monetarist

macroeconomic theory, sources of economic growth, The Federal
reserve system, Aggregate demand and supply, factors that shift AD
and AS, Fiscal policy, budgeting, impact of spending, taxation and

borrowing, the multiplier effect, the marginal Monetary policy, required

reserves, federal funds rate, Board of Governors of the Federal Reserve
System, open market operations, The federal open market committee,
the discount rate, contractionary and expansionary policy