Final Exam Review Sheet

CIA 4U1 June 2012 Final Exam Review Sheet Mr. Raposo
Final Exam: 2 hours
• Friday, June 22, 2012 9:00 am till 11:00 am, Room 220
• 100 marks, exam is worth 30% of final mark
• K/U marks: 50 multiple choice, T/I 20 marks: calculation/short answer 20 marks: Appl. Graphing, 10 Marks
Comm. Written response question (macro)
Microeconomics
Chapter 1
• Understand and explain the basic economic problem
• Scarcity, Choice, Needs/Wants
• Types of Economic Resources
• Microeconomics vs Macroeconomics
• Positive and normative statements
• Opportunity Cost and the Law of Increasing Opportunity Cost
• The PPC curve. What do the points represent on, within and beyond the PPC? Can the curve shift?
• Basic Economic Questions: What questions does any economy need to answer?
Chapter 2
• Demand curve, demand schedule and the Law of Demand
• The Determinants of demand; what makes the demand curve shift (and which way?) p.35-37
• Change in quantity demanded vs a change in demand (shift vs movement)
• Supply curve, supply schedule and the Law of Supply
• The Determinants of supply; what makes the supply curve shift (and which way?) p. 40-42
• Change in quantity supply vs a change in supply (shift vs movement)
• Market equilibrium: surpluses, shortages. Be able to understand what happens to equilibrium quantity and price if
demand increases (or decreases) and supply increases (or decreases). You will be graphing!
Chapter 3
• Elasticity of demand (elastic, unit, inelastic), perfectly elastic/inelastic demand
• Calculating price elasticity,
• Price ceilings/price floors: definitions and their impact (shortages/surpluses). Example: minimum wage,
agricultural price supports, rent ceilings
Chapter 4: Costs of Production
• Implicit and explicit costs, economic vs accounting profit
• Short-run products: total, average, marginal product and law of diminishing marginal returns
• Short-run costs: total, average and marginal costs, fixed and variable cost calculations
• Economies and diseconomies of scale
Chapter 5: Perfect Competition
• Market structures: perfect, monopolistic, oligopoly and monopoly
• Profit maximizing rule for the PC firm: MR=MC
Chapter 6: Monopoly and Imperfect Competition
• Market structures: oligopoly and monopoly
• Know market characteristics, won’t be required to graph imperfect competition
• Mergers: types and definitions
Macroeconomics
Chapter 7: Economic Welfare and Income Distribution
• Consumer/Producer Surplus and Dead Weight Loss
• Public vs Private Goods
• The Lorenz Curve
• Taxes and income: proportional, regressive, progressive taxes
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CIA 4U1 June 2012 Final Exam Review Sheet Mr. Raposo
Chapter 8: Measures of Economic Activity
• Know what national income accounts are
• Define GDP, GDP per capita and understand the limitations of GDP
• What causes economic growth? (Land, Labour, Capital, Entrepreneurship/Technology)
• The benefits/costs of economic growth (open letter from a “Growth Man/Non-Growth Man”
Chapter 9: Inflation and Unemployment
• Define inflation, deflation and hyperinflation
• What does CPI stand for and how is it measured?
• Calculate inflation over a given year with CPI provided
• Unemployment: Types of unemployment, definitions and examples
• What is full employment and the natural rate of unemployment?
Chapter 10: Economic Fluctuations
• Define aggregate demand (AD) and understand how increases (decreases) shift the AD curve
• Define aggregate demand (AS) and understand how increases (decreases) shift the AS curve
• Correctly label and understand the interaction of AD and AS, the impact on price levels and output and identify the
potential output target level
• Draw and label the business cycle, identifying when contractionary and expansionary fiscal policy is required
Chapter 11:Fiscal Policy
• Understand stabilization policy, understand expansionary and contractionary shifts in AD
• Understand automatic stabilizers
• Understand and calculate the multiplier effect, marginal propensity to consume (MPC), marginal propensity to
withdraw (MPW) and the spending multiplier
• Know what budget deficits, budget surpluses and balanced budgets are and how they relate to Canada’s most
recent Federal Budget
• Label the “leaky bucket” and explain its relevance to economics
Chapter 12:Money (upto p.331)
• List, explain and provide an example of the functions of money
• Understand the definitions of the supply of money
• Able to relate Money supply/interest rates
Chapter 13:Monetary Policy
• Monetary Policy: expansionary and contractionary
• Demand Pull and Cost Push inflation
• The role of the Bank of Canada
Chapter 14 & 15:International Trade)
• Exchange rates/appreciation/depreciation
• Fixed vs Floating/flexible exchange rates
• Imports/exports, current account, capital account