ECON312 Final Exam Study Guide

YOU MAY WANT TO PRINT THIS GUIDE. 1. The final exam is "open book, open notes." The maximum time you can spend in the exam is 3 hours, 30 minutes. If you have not clicked the Submit for Grade button by then, you will be automatically exited from the exam. In the Final Exam environment, the Windows clipboard is disabled, and so you still will not be able to copy exam questions or answers to or from other applications. 2. You should click t he S ave Answers but ton in the exam frequently. This helps prevent connection timeouts that might occur with certain Internet Service Providers, and also minimizes lost answers in the event of connection problems. If your Internet connection does break, when you reconnect you will normally be able to get back into your Final Exam without any trouble. Remember, though, that the exam timer continues to run while students are disconnected, so students should try to re-login as quickly as possible. The Help Desk cannot grant any student additional time on the exam. 3. Reminders:

You will only be able to enter your online Final Exam one time. Click the "Save Answers" button often. If you lose your Internet connection during your Final Exam, login again and try to access your Final Exam. If you are unable to enter the Final Exam, contact first the help desk and then your instructor. You will always be able to see the time remaining in the Final Exam at the top right of the page.

4. Assessments with Multiple Pages:

Make sure you click the "Save Answers" button before advancing to the next page (we also suggest clicking on save answers while you are working). Complete all of the pages before submitting your Final Exam for instructor review. Do NOT use your browser's Back and Forward buttons during the Final Exam. Please use the provided links for navigation.

5. Submitting Your Final Exam:

When you are finished with the Final Exam, click on the "Submit for Grade" button. Please note: Once you click the "Submit for Grade" button, you will NOT be able to edit or change any of your answers.

6. Exam Questions
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On page 1, there are 25 randomly selected multiple-choice questions each worth 4 points for a total of 100 points. On page 2, there are 20 randomly selected multiple-choice questions each worth 4 points for a total of 80 points. There are 2 randomly selected Essay questions with subset questions each worth 40 points.

The Final Exam covers all course TCOs and Weeks 1-7. The Final Exam contains three pages, which can be completed in any order. This means that not everyone will have the same questions. Even if you do have some of the same questions, they may not be in the same order. These questions are distributed amongst the TCOs. The entire exam is worth 260 points. On the essay questions your answers should be succinct, fully address each part of the question, and demonstrate your knowledge and understanding in a concise but complete answer. Some students opt to work on the essay questions first, due to their higher point value and length of time needed to adequately address each question. But this is entirely your choice. Remember always use proper citation when quoting other sources! This means that ANY borrowed material (even a short phrase) is being placed in quotation marks with the source (URL, author/date/page #) immediately following the end of the passage. Changing a few words in a passage does NOT constitute putting it in your own words and proper citation is still required. Borrowed material should NOT dominate a student's work, but should only be used sparingly to support your own thoughts, ideas, and examples. Heavy usage of borrowed material (even if properly cited) can jeopardize the points for that question. Uncited material can jeopardize a passing grade on the exam. As a part of our commitment to academic integrity, your work may be submitted to turnitin.com, an online plagiarism checking service. So please be VERY mindful of proper citation.

7. Some of the key study areas are as follows: (while these are key areas remember that the exam is comprehensive for all the assigned course content and this study guide may not be all inclusive. TCO 1 Scarcity Opportunity costs Capitalism, Communism, and Socialism Command economy, Mixed economy Four factors of production or four economic resources Production Possibilities Curve, Production Possibilities Frontier, Law of Increasing Costs Circular flow model Invisible Hand of Adam Smith Market failure, Externalities TCO 2 Market prices based on Demand and Supply The law of demand, Income effect, Demand determinants The law of supply, Supply determinants Elastic demand, Inelastic demand, and Total Revenue Elastic supply, Inelastic supply Compute the price elasticity of demand Income elasticity of demand, Normal goods, Inferior goods TCO 3 Price discrimination The monopolist and the perfect competitor Market entry barriers Economies of Scale, Diseconomies of Scale A purely competitive firm Monopolistic competitors and Oligopolists
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Price leadership model of oligopoly, Kinked Demand Oligopoly Cartel, Collusion Fixed Costs (FC) Variable Costs (VC) Economic costs, Economic profits Explicit costs, Accounting costs Marginal Revenue (MR), Marginal Cost (MC), Marginal Product (MP) Short-run and Long-run Shut-down point, Short Run Output decision The law of diminishing marginal returns Profit-maximizing firm TCO 4 GDP - real, nominal, what is counted The income and expenditure approach to GDP Avoid multiple counting Business Cycles: Inflation and Unemployment problems Inflation - Demand pull, Cost push Hyperinflation Stagflation Recession Unanticipated Inflation - gainers vs. losers Labor force Types of Unemployment: Frictional, Cyclical, and Structural TCO 5 Aggregate Supply - short run, long run Aggregate Demand and Price Level The Keynesian Critique of the Classical System Deflation Disinflation TCO 6 Government Spending, Taxes Tools of Fiscal Policy MPC, Multiplier Discretionary Fiscal Policy Automatic Stabilizers Crowding-out effect Budget Surplus, Federal Deficits Public Debt TCO 7 Federal Reserve Open Market Operations Tools of Monetary Policy Expansionary vs. Contractionary Monetary policy Federal Funds Rate Discount Rate Money Demand, Money Supply Reserve Requirement Deposit Expansion Multiplier FDIC TCO 8
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Comparative Advantages vs. Absolute Advantages Specialization and Trade Tariffs Import Quotas VERs Nontariff barriers Free Trade Arguments for and against free trade Trade Deficits: Causes, How to Reduce Trade Deficits WTO TCO 9 Balance of Payments Current Account Deficit and Surplus Freely Floating Exchange Rates Determinants of Exchange Rates Weak dollar vs. Strong dollar and Trade TCO 10 Fiscal Policy Motives and Impacts Monetary Policy Motives and Impacts Trade Policy Motives and Impacts

8. Areas that were discussed in the threads will be prime targets. 9. Assignments will also be prime targets for revisiting. 10. Reviewing the TCOs will also be a great preparation for the Final Exam which I have listed below for your convenience. Given the basic economic problem of scarcity, apply Opportunity Costs, Production Possibilities, and the Circular Wheel of Income to compare and contrast the ways in which capitalism, central, and mixed economic systems answer the three fundamental economic questions of what to produce, how to produce, and for whom to produce, including global environments. Given a supply schedule, a demand schedule, and a change in one or more determinants of supply and demand, graph the supply and demand curves and illustrate the resulting change in the equilibrium price and quantity. Given the costs of production and market structure characteristics analyze how the demand function under (a) perfect competition and (b) imperfect competition will each drive a different approach for maximizing profit and allocation of resources. Given current National Income accounts data, calculate the Gross Domestic Product using both income and expenditure methods used by the U.S. Commerce Department. Given aggregate demand and supply curves, and a change in one of the determinants of aggregate demand and supply, evaluate the possibilities of inflation or recession in historical and current circumstances.

Given a change in government purchases (G) or net taxes (T), and the Marginal Propensity to Consume (MPC) of the economy, analyze the effects of these fiscal policies on equilibrium real GDP using historical and current circumstances. Given the assets and liabilities of a bank and the required reserve ratio, calculate the maximum potential of the banking system to create deposits, assuming no leakages from the banking system, and apply appropriate monetary policy, using historical and current situations. Using trade theory, demonstrate either graphically or theoretically how countries would be better off from specialization, trade, and global coordination using historical and current circumstances. Given a market for a specific currency, a specified exchange-rate system, a time horizon, and a change in one of the determinants of exchange rates, determine the effects of the change on the value of the currency and the country's balance of payments, using historical and current circumstances. Given a need to make and defend a decision based on economic factors only, develop a rational approach for legitimizing both social issues and political agendas as part of a statement announcing this decision, indicating (in the simplest terms possible) the circumstances under which the expected results might be opposite to what is actually observed.

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Finally, if you have any questions for me, please post them to our Q & A, or e-mail me. Good luck on the exam!