6th Period Survey

Economics Final Exam Review

Economics Final Exam Review                         

https://docs.google.com/document/d/1XvoqEcVA1NBvXg6bAUN7617NqdCBgA0ltdF3Q52evKg/pub

Part 1.    Answer the following questions and provide examples when asked.

Chapter 1

          

Describe the three Factors of Production?

What are resources used to make all goods and services called?

What does production possibilities graph show and how does an economy expand it production?

Describe Efficient and Inefficient economies.

What is law of increasing costs and give an example?

What is the Guns for Butter tradeoff?

Describe difference between Human Capital and Physical Capital?

Chapter 2

What are the 3 economic questions that every society must answer?

Describe the 5 types of economies and what 5 countries have a command economy?

What are the advantages of a free market?

Who was Adam Smith?

What is the purpose of competition?

Who Was Vladimir Lenin?

Who Was Karl Marx?

Chapter 3

 What is a safety net?

Compare and contrast positive and negative externalities?

What is Temporary Assistance for Needy Families (TANF)?

What is a public good and what are its 2 features?

Give 5 examples of public goods?

    

What is the free enterprise system?

Describe the Government’s role in free enterprise?

What is gross domestic product?

What is the difference between a business cycle and day-to-day market fluctuations?

What is the purpose of Social Security?

 Chapter 4

Describe the law of Demand?       

What does a shift in the demand curve usually specify?    

How do consumers make their desires known to businesses most effectively?

What is a company’s total revenue?

When prices rise, what happens to income?

What is an elastic good and give 5 examples?

What is an inelastic good and give 3 examples?

Chapter 5

Describe the Law of Supply.

What do sellers do if they expect the price of goods they have for sale to increase dramatically in the near future?

What is a Fixed cost and give an example?

What is a Variable cost and give an example?

What is a Total cost and give an example?

What is a Marginal cost and give an example?

What happens to quantity when the selling price of a good goes up?

What factor has the greatest influence on elasticity and inelasticity of supply?

What is the role of technology in lowering the cost of producing an item and give 3 Examples?

What is a government subsidy?

Chapter 6

Describe what happens when you combine supply and demand?

What happens when the supply of a nonperishable good is greater than the consumer wants to buy, explain?

What do governments do the supply of goods in time of war, explain?

What is market equilibrium?

What happens to a market in equilibrium when there is an increase in supply?

What happens to a market in equilibrium when there is an increase in demand?

Chapter 10

What is the Federal Deposit Insurance Corporation (FDIC), and what is its purpose?

What is the purpose for applying for a credit card?

What is the purpose for applying for a mortgage?

Explain 3 reasons for using coins and currency vs. bartering or using gold?

Chapter 11

What are Savings bonds and describe how they function?

What are Treasury bonds and describe how they function?

What are Municipal bonds and describe how they function?

What are Corporate bonds and describe how they function?

What is Blue Chip stock?

What is the Dow Jones Industrial Average and what does it represent?

Give 3 examples of financial intermediaries.

Where are most trades made?

Chapter 17

What is the difference between Absolute advantage and comparative advantage?

What does the law of Comparative advantage state?

What is a trade Barrier?

What is the purpose of a tariff?

What are International Cooperation Agreements?

What is the WTO and what is its purpose?

What is the EU and what is its purpose?

What is NAFTA and what is its purpose?

What does a high population growth rate indicate?

                 

Part 2.    Define the following terms and give examples for each one:

capital

capital gain

ceteris paribus

comparative advantage

complement

continuum

currency

default

demand curve

development

diminishing marginal returns

elastic

elasticity of demand

equilibrium

equities

European Union (EU)

excess demand

factors of production

foreign direct investment

free enterprise

goods

growth

incentive

income effect

inferior good

infrastructure

interest

investment

labor

land

law of demand

law of supply

liquidity

macroeconomics

marginal cost

marginal product of labor

marginal revenue

market supply curve

minimum wage

NAFTA

need

normal good

portfolio

poverty threshold

price ceiling

price floor

principal

privatization

production possibilities graph

prospectus

protectionism

public disclosure laws

public interest

quantity supplied

rationing

regulation

representative money

scarcity

services

share

shortage

socialism

speculation

spillover cost

subsidy

substitute

supply shock

surplus

transition

unit of account

variable

welfare

World Trade Organization (WTO)

yield

Career Budget Scenarios

Federal Income Tax

Salary

Hourly wage

Monthly Budget

Mortgage

1.

John graduated with a degree in Electrical Engineering and got a job starting at $62,800 a year in Austin.  He has student loans totaling $46,000 and will start making monthly payments of $625 in September.  He also has a credit card payment of $133 per month on expenses he incurred during Spring Break.  John currently pays $800 per month for an apartment near his work and will need to get a vehicle to travel to Dallas once a week.  John is interested in purchasing a home, will he qualify? if so, how much of a mortgage can he afford.

2.

John graduated with a degree in Electrical Engineering and got a job starting at 62,800 a year in Austin.  His Wife Julie has a job as an Assistant Chef making $22 per hour at 32 hours a week, but only works 42 weeks out of the year.  They have student loans totaling $56,000 and will start making monthly payments of $725 in September.  They also have a credit card payment of $153 per month on expenses they incurred during Spring Break.  They currently pay $1100 per month for an apartment near their jobs and Julie will need to get a vehicle to travel to work, but John can walk.  They are interested in purchasing a home, will they qualify? if so, how much of a mortgage can he afford.

3.

Carlos graduated with a degree in Psychology and got a job starting at 43,500 a year in Dallas.  He has student loans totaling $32,000 and will start making monthly payments of $425 in September.  He also has a credit card payment of $275 per month on expenses he incurred getting treatment for a torn ligament in his knee.  He currently pays $400 per month for an apartment that he splits with a friend.  Carlos is interested in purchasing a home, will he qualify? if so, how much of a mortgage can he afford.

4.

Carlos graduated with a degree in Psychology and got a job starting at 43,500 a year in Dallas.  Fernanda his wife got a similar job starting at 46,800 a year at a different Hospital.  They have student loans totaling $52,000 and will start making monthly payments of $725 in September.  They also have a credit card payment of $275 per month on expenses Carlos incurred getting treatment for a torn ligament in his knee.  They currently pays $725 per month for an apartment.  They are  interested in purchasing a home, will they qualify? if so, how much of a mortgage can they afford.

5.

Janice graduated with a degree in Elementary Education and got a job starting at 44,500 a year in Houston.  She has student loans totaling $22,000 and will start making monthly payments of $285 in September.  She also has a credit card payment of $175 per month from travel expenses.  She currently pays $590 per month as her share for a house that she rents with her two sisters.  She also receives a structural settlement of $235 per month as the result of an accident 4 years ago while traveling on a city bus.  Janice is interested in purchasing a home, will she qualify? if so, how much of a mortgage can he afford.

6.

Janice graduated with a degree in Elementary Education and got a job starting at 44,500 a year in Houston.  Her husband Bill has a job that pays him $32.75 per hour an Underwater Welder working 28 hours per week, working 42 weeks per year.  they have student loans totaling $32,000 and will start making monthly payments of $455 in September.  They also have a credit card payment of $275 per month from travel expenses.  They currently pay $790 per month as their share for a house that they rent with a relative.  They are interested in purchasing a home, will they qualify? if so, how much of a mortgage can they afford.

7.

Raquel graduated from high school and got a job at Furr’s making $9.00 per hour working 40 hours per week, 50 weeks per year.  She has 2 children and receives child support payments of $425 per month from a former boyfriend and $350 a month in alimony payments from an ex-husband.  She also has a credit card payment of $225 per month for childcare services.  She currently pays $250 per month after receiving housing assistance from the city of Plano, Texas.  Janice is interested in purchasing a home, will she qualify? if so, how much of a mortgage can he afford.

8.

Rogelio graduated from high school, went to Vocational School and got a job at Sears as a mechanic making $18.00 per hour working 40 hours per week, 50 weeks per year.  He has $18,000 in school loans and pays $299 per month.  He has 3 children and receives child support payments of $525 per month from his ex-wife.  He also has a credit card payment of $325 per month for childcare services.  He currently pays $295 per month after receiving housing assistance from the city of Brownsville, Texas.  He also gets $200 per month from Sears for educational loan payments.  Rogelio is interested in purchasing a home, will he qualify? if so, how much of a mortgage can he afford.

9.

Tom graduated from high school 6 years ago and got a job at Costco.  He currently makes $16.50 per hour working 40 hours per week, 50 weeks per year.  He has a daughter and receives $675 per month from social security benefits as the result of his wife passing away 3 years ago.   Just recently bought a new camaro and had a car payment of $405 per month, and received 1 free month of no car payment every year from a contest that he won.   He also has a credit card payment of $75 per month for supplemental child care services.  He currently pays $350 per month after receiving housing assistance from the city of Plano, Texas.  Tom is interested in purchasing a home, will =he qualify? if so, how much of a mortgage can he afford.

10.

Tim graduated from high school 4 years ago and got a job at Sam’s Club.  He currently makes $13.50 per hour working 40 hours per week, 50 weeks per year.  He has a daughter and receives $575 per month from social security benefits as the result of his wife passing away 7 years ago.   He recently bought a new truck and has a truck payment of $329 per month.   He also has a credit card payment of $95 per month for supplemental child care services.  He currently pays $210 per month after receiving housing assistance from the city.  Tim is interested in purchasing a home, will he qualify? if so, how much of a mortgage can he afford.


1. Which was your scenario?
2. After all expenses were paid, how much of a mortgage could your person/people afford?
3. Are there any expenses that could be reduced to have more disposable income?
4. How much better could your person/people have prepared in order to have a better life?

Despite Low Employment, Millennials Hold Key To Reviving South Texas

November 20, 2014 3:55 AM ET

i i

Olmo Maldonado (center) returned to his hometown of McAllen, Texas, despite the low employment rate for millennials.

Hansi Lo Wang/NPR

This story is part of the New Boom series on millennials in America.This story is part of the New Boom series on millennials in America.

Welcome to boot camp for the young and unemployed in McAllen, Texas.
"We're going to go ahead and do this," says instructor Marco Lopez, leading a small classroom of millennials through do's and don'ts for job seekers inside a strip mall near McAllen.
In this area, only half of the people between 20 and 24 have a job, according to the Brookings Institution, a think tank based in Washington, D.C. In fact, among the 100 largest metro areas in the U.S., the McAllen area has the lowest employment rate for young millennials. The numbers aren't much better for older millennials between 25 and 34. Their employment rate is just 68 percent, placing the area 95th out of 100 by that measure.

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The McAllen metro area of Texas has the lowest employment rate for millennials ages 20-24 among the 100 largest metro areas in the country. 

"I feel that extra pressure against me," says Trejo, a participant in this workshop for unemployed millennials with little or no work experience.
After a week of training at the Workforce Solutions Center in Edinburg, Texas, he spends a few months working for the local government. It's temporary, but it's also a rare chance, he says, to start building a legitimate career in his hometown.
"I've had a lot of opportunities to get affiliated with the gang here or get in with the cartels in Mexico," explains Trejo, who adds that it's easier to join a gang than to get a job.
Trejo says he wants to join law enforcement one day. He finally received his high school diploma this year after dropping out of high school at 17.
"I really want to be someone in life, because my mom never finished school. My dad never finished school. Most of my family, my uncles never finished school," he says.
'I Need To Get Out Of Here'
"Not many people get to graduate from high school. The few that do don't always find themselves fit for college, like they feel like they can't do it," says 20-year-old Misty Miller, a student at the University of Texas-Pan American, located just north of McAllen.
Miller, like the majority of residents in the area, is Mexican-American. She says family ties keep many millennials in the area even when job opportunities are scarce.
"Most Mexican kids don't leave home until they're married, if they have a good job or not," she says. "It's just being with your family."
Family drew 30-year-old Olmo Maldonado back to McAllen. His first big break in the tech industry came in California, where he worked as a software engineering intern at Google. At that time, he didn't see a future in the Rio Grande Valley.
"I was really skeptical and pessimistic about the Valley," he says. "My rule of thumb was I need to get out of here as quickly as possible."
That changed after Maldonado came home to help run his mother's marketing company for what was supposed to be a few months. Now, almost five years later, he's working to inspire other millennials, leading monthly "Tech Tuesdays" talks by local entrepreneurs, engineers and scientists.
He wants to add technology to sectors like healthcare, government and tourism that drive the economy here. As more local leaders in McAllen retire, he says he sees opportunities for a new generation.
"We can take part in boards. We can be part in legislation," he says. "We can be part in a lot of activities."
'I'll Be Needed Here'
"There is potential here, but not necessarily potential for college students graduating," says Leilani De Leon, 22, who is set to graduate from UTPA next year with a marketing degree.
Born and raised in McAllen, De Leon says she's ready to relocate for her career.
"I am open to going anywhere," she says. "If I got to leave, I got to leave."
For the area to prosper, millennials who do leave need to eventually come back, according to UTPA economics professor Salvador Contreras. He says McAllen's geography — 300 miles away from San Antonio, the nearest major U.S. city — puts the area at a disadvantage.
"The area as a whole is depressed. Millennials, along with Generation Xers and so on and so forth, everybody's in the same boat," he says.
Contreras says McAllen's population has grown faster than economic development here. That means, for now, there aren't enough good-paying jobs to go around. Highly-skilled millennials, he says, will be key to helping break this cycle of poverty in the future.
Miller, the UTPA student, believes she can play a role now. She plans to stay put after graduation and help the community overcome health issues like high obesity rates.
"I am studying nutrition," Miller explains. "So I think I'll be needed here."
And so will other millennials.

After reading the article what is your impression of what is going on in the Rio Grade Valley?  What is your personal experience and what are your plans once you graduate from high school?  What can the local government do to help students and locals who struggle to find employment and encourage college graduate to stay or return the Rio Grande Valley.  What are advantages and disadvantages to remaining in the local region?

As Japan Falls Into Recession, Europe Looks to Avoid It

By LIZ ALDERMAN and JONATHAN SOBLE

NOVEMBER 17, 2014

PARIS — Japan looked like the model for economic revival. Growth was back on track. The stock market was surging. Inflation, which had eluded Japan for decades, was even returning.

But Japan’s grand economic experiment, a combination of fiscal discipline and monetary stimulus, is collapsing. On Monday, the country unexpectedly fell into recession, a downturn that has painful implications for the rest of the world.

Japan’s unorthodox strategy was supposed to offer a road map for other troubled economies, notably Europe. Fiscal belt-tightening and tax increases, while leaning on the central bank to pump money into the economy, was expected to help overcome a malaise.

The formula, though, has failed to ignite a meaningful recovery in Japan — and has even added to its woes. Europe must now decide whether to follow Japan’s lead by injecting more money into the economy, as the region’s central bank considers a similarly aggressive bond-buying campaign known as quantitative easing. And the United States, which just ended its own six-year stimulus effort, doesn’t offer much of a cushion should other economies stumble further.

“The United States is about the only growth beacon in the global economy right now, and that is not a very nice place to be,” said Jacob Funk Kirkegaard, an economist at the Peterson Institute for International Economics in Washington. “An American growth pickup is positive, but it looks like the rest of the world is again going to be relying on the U.S. as a consumer of last resort.”

Japan’s prime minister, Shinzo Abe, won power two years ago on a promise to pull the economy out of nearly two decades of corrosive wage and price declines. The initial response of both Japanese consumers and global investors was ebullient: The economy surged during the first few months of his administration in early 2013, and Japanese stock prices soared.

Mr. Abe’s program, called Abenomics, at first relied on a one-two punch of government spending and financial support from the Bank of Japan, the country’s central bank. The bank sharply increased its program of buying government bonds and other assets, similar to the stimulus effort recently ended by the United States Federal Reserve.

In some ways, Japan has been more aggressive than the United States. Its bond-buying program, which was expanded last month, is now bigger relative to the size of its economy than the Fed’s was at its peak.

Much of the enthusiasm for Abenomics has evaporated, however. Some economists blame a lack of action by Mr. Abe’s government in areas beyond pump-priming stimulus, such as deregulation and trade.

A turn toward tighter fiscal policy has taken the majority of the blame. Government data released on Monday showed that the country unexpectedly fell into recession in the third quarter, hampered by rising sales taxes that have discouraged consumers from spending. Mr. Abe is expected to shelve a second tax increase, lest the Japanese economy and consumer confidence erode further.

“What Japan shows is that if you have longstanding economic stagnation, having an aggressive monetary policy and even sizable fiscal reform is not going to work without deep-rooted structural reform,” Mr. Kirkegaard said. “The experience of Japan must be at the top of the minds of European leaders.”

High on the agenda is whether Europe should pursue large-scale purchases of government bonds, so-called quantitative easing.

The European Central Bank recently said it was prepared to take additional steps to revive the struggling economy, by lending more to banks and buying bonds backed by mortgages and other assets. Critics say the bank has not acted nearly aggressively enough to help revive growth, which has essentially stagnated.

The similarities between the two places is strong, which has prompted some economists to wonder whether Europe will turn into another Japan.

Europe and Japan have stuck with various versions of austerity, neither pushing ahead with deep-seated changes to their economy that analysts say are needed to revive long-term growth. Europe is also increasingly facing down the Japan-like specter of deflation as a recovery lags.

The political debate is also developing along the same lines.

A number of countries, led by France and Italy, recently balked at European Union requirements to doggedly adhere to fiscal targets and eschew stimulus spending that some economists say is critical. Some economists say that Japan’s situation only adds to the argument that fiscal belt-tightening, while sometimes needed to mend a country’s finances, hurts growth when an economy is in decline.

European politicians now widely blame austerity policies for delaying a return to growth, but Chancellor Angela Merkel of Germany is wary of loosening requirements for fiscal discipline after runaway debt levels and high deficits helped generate the eurozone debt crisis. The region’s leaders are scheduled to meet in early December to discuss further strategies for growth.

“The main implication is we are beginning to see what it might look like in Europe if we go down that road,” said Bart van Ark, chief economist for the Conference Board, referring to Japan’s recession.

“Europe has the potential to become a second Japan in terms of significantly slowing demographics, and weak per capita income growth,” he said. The Japanese experience shows that efforts to keep the economy afloat with more inflation and growth don’t help sustain higher growth in the long term. What’s needed, he said, is a “reform agenda, and that is a very difficult strategy” for politicians to pursue in any country.

The problems in Europe and Japan put additional pressure on the United States and China, which face their own headwinds.

The United States increased at a healthy 3.5 percent annualized pace in the third quarter, and unemployment has fallen below 6 percent. But troubling signs remain, including less-than-robust consumer spending and a lift from military spending that may be temporary.

China, too, is under pressure. Growth in China has cooled to 7.3 percent. While that is the envy of many countries, a slow clip by Chinese standards has raised questions about the nation’s economic health.

The disparate issues — a weak recovery in Europe, slowing growth in China and other emerging markets, as well as Japan’s failure to sustain any sort of a turnaround — have rung alarm bells in Washington.

Last week, Treasury Secretary Jack Lew said in a speech in Seattle that the United States was increasingly being relied upon to perform as locomotive for a global recovery.

“But the global economy cannot prosper broadly relying on the United States to be the importer of first and last resort, nor can it rely on the United States to grow fast enough to make up for weak growth in major world economies,” he said.

After reading the article, what events led to Japan's recession?  How does the recession affect the U.S. economy and what actions can the U.S. Government enact so that we can avoid what Japan is going through?

Ch 6. web address

https://docs.google.com/presentation/d/1wBVd1wivvxXs_fkUI0BOr5Pm0mJn0mATSj8cSVFYYIg/pub?start=true&loop=false&delayms=3000

Ch. 6 Prices Powerpoint