Honors Economics
Midterm Study Guide
Fall 2015, Ch. 1-7
Terms to know:
1. Economics
2. Factors of production
3. Entrepreneurship
4. Scarcity
5. Opportunity cost
6. Profit
7. Macroeconomics
8. Microeconomics
9. Private property
10. Specialization
11. Voluntary exchange
12. The price system
13. Market competition
14. Circular flow model (also in CTK)
15. Full employment
16. Economic growth
17. Price stability
18. Economic freedom
19. Economic security
20. Economic equity
21. Efficiency
22. Law of demand
23. Demand
24. Price effect
25. Diminishing marginal utility
26. Substitutes
27. Complementary goods
28. Supply
29. Law of supply
30. Marginal cost
31. Market supply
32. Elastic
33. Market-clearing price
34. Incentives
35. Income
36. Wealth
37. APR
38. Budget
39. Credit
40. Rate of Return, Safety, and liquidity
41. Consumer protections
42. Dividends
43. Not-for-profit
44. Stockholder
45. Board of directors
46. Franchise
47. Sole proprietorships
48. Partnerships
49. Corporations
50. Bonds
Concepts to know:
1. What are the pillars of the Free Enterprise system?
2. What are the components of the economic way of thinking?
3. Describe the want-satisfaction chain
4. Describe the circular flow model
5. Compare economic market systems (traditional, free/capitalist, command)
6. What is money is use for?
7. What causes demand to increase/decrease?
8. What causes changes in supply?
9. Know how to shift a demand or supply curve in a given scenario
10. Know how to identify the market equailibrium price (or market clearing price)
11. Explain how consumer interests are protected in a market economy
12. Compare and contrast sole proprietorships, partnerships, and corporations
13. Identify what an individual should consider in making savings and investments
14. Explain how a small business can get started.