EconomicsSemester Exam Study Guide
Grade 12
Academic Year 2016 -2017
The Grade 12 Economics Semester Exam will consist of four sections.
Part 1: This section will consist of multiple choice questions.
Part 2: This section will consist of True or false questions with correcting false
statements.
Part 3: This section will consist of short essay questions.
Part 4: A bonus question out of 5 points.
The information in this document will help to prepare you for the exam. Make sure you read
the text, review notes, worksheets, homework, and old quizzes. Review the vocabulary for
each section below and make sure you can answer the questions listed underneath each
section. Good Luck 
Chapter 1-
The Economic Way of Thinking
Section 1–
Scarcity: The Basic Economic Problem
Vocabulary:
Wants, needs, scarcity, economics, goods, services, consumer, producer, factors
of production, land, labor, and capital resources, technology, entrepreneurship.
1. What is scarcity and how does it affect everyone?
2. What are the three economic questions that societies face?
3. Describe the factors of production.
Section 2 –
Economic Choice Today: Opportunity Cost
Vocabulary:
Incentives, utility, economize, trade-off, opportunity cost, cost-benefit analysis,
marginal cost, marginal benefit.
1. Explain how incentives and utility and the need for economizing influence people’s economic
choices.
2. What are opportunity costs and tradeoffs?
3. Cost-benefit analysis and marginal costs/benefits.
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Section 3 –
Analyzing Production Possibilities
Vocabulary:
Economic model, production possibilities curve, efficiency, underutilization, law
of increasing opportunity costs.
1. Describe what a production possibilities curve is and how it is constructed.
2. Explain what economists learn from using production possibilities curves.
3. Analyze how production possibilities curves show economic growth.
Section 4 –
The Economists Toolbox
Vocabulary:
Micro-economics, Macro-economics, Positive economics,
economics.
1. Compare Macroeconomics to Microeconomics.
2. Contrast positive economics with normative economics.
Election Vocabulary Sheet: Campaign, Candidate, Citizen, Debate, Democracy, Exit Poll, General
Elections, Landslide, Nominee, Party, Platform, Primary, Constitution, Electoral-college, Campaign
Manager, Freedom of the press.
Chapter 2-
Economic Systems
Section 1-
Introduction to Economic Systems
Vocabulary:
Economic system, traditional economy, command economy, market economy.
1. Identify the three main types of economic systems.
2. Understand how a traditional economy operates including its advantages and disadvantages.
3. Analyze how modern forces are changing traditional economies.
Section 2-
Command Economies
Vocabulary:
centrally planned economies, socialism, and communism, authoritarian.
1.
2.
3.
4.
Describe the main features of a command economy.
Note how socialism and communism differ.
Identify modern examples of command economies.
Explain the advantages and disadvantages of a command economy.
Section 3-
Market Economies
Vocabulary:
private property rights, market, laissez faire, capitalism, voluntary exchange,
profit, competition, consumer sovereignty, specialization, circular flow model,
product market, factor market.
1. Describe what a market is and how it works.
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2. Identify the main features of a market economy.
3. Analyze how a circular flow model represents economic activity in a market economy.
4. Explain the advantages and disadvantages of a market economy.
Section 4-
Modern Economies in a Global Age
Vocabulary:
Mixed economy, nationalize, privatize, global economy.
1. Identify the main characteristics of a mixed economy.
2. Understand why most modern economies are mixed economies.
3. Explain why modern economies are becoming increasingly global.
Chapter 3-
The American Free Enterprise System
Section 3 -
Government and Free Enterprise
Vocabulary:
Market failure, public goods, free riders, infrastructure, externality, negative
externality, positive externality, subsidy, safety net, transfer payment, public
transfer payment.
1. Understand that one role of government in the U.S economy is to address market failures.
2. Analyze why governments provide public goods and infrastructure.
3. Explain how governments seek to decrease negative externalities and increase positive
externalities.
Unit 2:
Market Economies at Work
Chapter 4:
Demand
Section 1 -
What is Demand?
Vocabulary:
Demand, law of demand, demand schedule, market demand schedule, demand
curve, market demand curve.
1. Define demand and outline what the law of demand says.
2. Explain how to interpret and create demand schedules and describe the role of market research
in this process.
3. Explain how to interpret and create demand curves.
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