ECON 312 Principles of Economics Complete Course and Final Exam

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ECON 312 Principles of Economics


Week 1


Week 1 Discussion Opportunity Cost (Graded)

Give an example of how the Principle of Opportunity Cost applies to your life. Think of a recent decision you made. It could be a decision as simple as whether to eat out or cook your own dinner, or it could be a decision to quit your job and go back to school. What alternatives did you consider? How did you arrive at your final decision? Did you implicitly weigh marginal cost and marginal benefit? How does the concept of opportunity cost apply to production possibilities curve (PPC) analysis? How can we use PPC analysis to examine what we do?


Week 1 Quiz Set 1

Week 1 Quiz Set 2


Week 2


Week 2 Discussion Demand, Supply, and Market Equilibrium

Think about a product that you have purchased recently (e.g. soda, diapers, takeout meals, milk, shoes, manicure/pedicure, video game, etc.). Explain how the law of demand affected your purchase. Give specific examples of how the determinants of demand and supply affect this product (T-I-P-E-N and P-R-E-S-T). What happens to the demand curve and the supply curve when any of these determinants change? Give examples of scenarios that would cause a change in demand versus a movement along the same demand curve and supply curve for this product. Discuss the new equilibrium price and quantity that result from these changes. Can you demonstrate some of these changes graphically?

Week 2 Quiz


Week 3


Week 3 Discussion A Firm’s Shut Down Decision (Graded)

Say you are the manager of a perfectly competitive firm selling a product. Your business is making a loss because total revenue is less than total costs. What would you do--shut down or continue to operate? Use hypothetical numbers to explain. Information you need to provide include--state the product you are selling, the price of the product, the quantity of the product you produce, fixed costs, total cost, figure out total revenue, total and average variable costs. Then go ahead and make your decision. Explain carefully why it makes better sense to shut down rather than continue to operate or to continue to operate rather than shut down, as the case may be. How do fixed costs play a role in your analysis? What is the difference between shutting down and going out of business?

Week 3 Assignment:

ECON 312 Week 3 Assignment; Anti-Trust Case 1250 Words


Week 3 Quiz Set 1

Week 3 Quiz Set 2


Week 4

Week 4 Discussions GDP (Graded)

Go to the Bureau of Economic Analysis website,, and access the BEA interactively by selecting "National Accounts" and then "National Income and Product Account Tables." Select "Frequently Requested NIPA Tables," and find Table 1.1.1 on GDP. What is the current GDP growth rate for the U.S.? Examine the trend over the past few years. What trends interest you? What stage of the Business Cycle would the U.S. economy be in currently given the trends? Why might GDP not be considered an accurate measure of economic well-being of a country? Identify at least three limitations of GDP as a measure of economic well-being.


Week 4 Midterm Exam Set 1

(TCO 1) As a consequence of the condition of scarcity

(TCO 1) The opportunity cost of constructing a new public highway is the

(TCO 1) A nation can increase its production possibilities by

(TCO 1) Which expression is another way of saying "marginal benefit"?

(TCO 1) The individual who brings together economic resources and assumes the risk of business ventures in a capitalist economy is called the

(TCO 1) The Soviet Union economy of the 1980s would best be classified as

(TCO 1) The simple circular-flow model shows that workers, entrepreneurs, and the owners of land and capital offer their services through

(TCO 1) Consumers express self-interest when they

(TCO 1) Which is not one of the five fundamental questions that an economy must deal with?

(TCO 1) The major "success indicator" for business managers in command economies like the Soviet Union and China in the past was

(TCO 2) An increase in demand means that

(TCO 2) At the point where the demand and supply curves intersect

(TCO 2) Black markets are associated with

(TCO 2) An increase in demand for oil along with a simultaneous increase in supply of oil will

(TCO 2) If Product Y is an inferior good, a decrease in consumer incomes will

(TCO 2) If the price elasticity of demand for a product is equal to 0.5, then a 10 percent decrease in price will increase quantity demanded by

(TCO 2) Total revenue falls as the price of a good is raised, if the demand for the good is

(TCO 2) You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than 1.  To increase total revenues, you should:

(TCO 2) A state government wants to increase the taxes on cigarettes to increase tax revenue.  This tax would only be effective in raising new tax revenues if the price elasticity of demand is

(TCO 2) When universities announce a large tuition increase and follow it with an announcement that more financial aid will be available, they are assuming that students who pay full tuition

(TCO 3) Suppose that you could prepare your own tax return in 15 hours, or you could hire a tax specialist to prepare it for you in two hours.  You value your time at $11 an hour.  The tax specialist will charge you $55 an hour.  The opportunity cost of preparing your own tax return is

(TCO 3) Economic profits are equal to

(TCO 3) The main difference between the short run and the long run is that

(TCO 3) The law of diminishing returns only applies in cases where

(TCO 3) Marginal cost can be defined as the

(TCO 3) If the price of a fixed factor of production increases by 50 percent, what effect would this have on the marginal-cost schedule facing a firm?


Midterm Exam Set 2

Midterm Exam Set 3


Week 5

Week 5 Discussion 

Aggregate Demand and Aggregate Supply (Graded)

Go to the BEA website On the left tab under Publications, go to the Interactive Data Tables. Select National Income and Product Accounts. From Table 1.1.6 and 1.1.7 examine all four components of GDP (C, I, G, and Xn). Which of these four components of AD declined the most during the 2007 and 2009 recession? Do you think an increase in government's spending (G) can boost the Aggregate Demand (AD) in a recession? Analyze why the economy may operate below full-employment GDP in the short run. How can the multiplier have a negative effect? What is the relationship between the multiplier and the marginal propensities? Explain.

Week 5 Quiz Set 1

Week 5 Quiz Set 2


Week 6


Week 6 Discussion Money and Banking (Graded)

What factors led to the mortgage default crisis? How did mortgage defaults affect banks involved in mortgage lending and mortgage investing? Securitization? TARP? What do these mean? How did mortgage-backed securities spread losses during the mortgage default crisis? How does TARP illustrate the problem of moral hazard? What did the Federal Reserve do during the financial crisis of 2008 and 2009? How did the recent financial crisis affect the financial services industry? What are some of the major provisions of the Wall Street Reform and Consumer Protection Act?

Week 6 Assignment

 Current Macroeconomic Situation in the U.S (850 Words)

Week 6 Quiz



Week 7

Week 7 Discussion Free Trade (Graded)

Are you for or against free trade? Are you for or against NAFTA? What is the economic basis for trade? Explain the underlying facts that support free trade and give an example of a good that you purchased recently that is based on resource differences. What are some examples of goods that the U.S. has comparative advantage in producing? Take a look at the tag of the shirt/dress/pants you are wearing today. Where was it made? Anyone wearing “Made in America” items of clothing today? We sometimes hear people say “Buy American." Why don't we? What is the basis of international trade? What are the benefits and the costs? Under what conditions would you advocate for trade restrictions?

Week 7 Quiz



Week 8 Final Exam


  1. (TCO 1) Opportunity cost is best defined as (Points : 4)
  2. (TCO1) Which is not a factor of production? (Points : 4)
  3. (TCO1) A point outside the production possibilities curve is (Points : 4)
  4. (TCO1) A basic characteristic of a command system is that (Points : 4)
  5. (TCO 2) Which is consistent with the law of demand? (Points : 4)
  6. (TCO 2) A decrease in supply and a decrease in demand will (Points : 4)
  7. (TCO 2) You are the sales manager for a software company and have been informed that the price elasticity of demand for your most popular software is less than one.  To increase total revenues, you should (Points : 4)
  8. (TCO 2) The price elasticity of demand increases with the length of the period considered because (Points : 4)
  9. (TCO 2) A profit-maximizing firm in the short run will expand output (Points : 4)
  10. (TCO 2) Which case below best represents a case of price discrimination? (Points : 4)
  11. (TCO 3) A major reason that firms form a cartel is to (Points : 4)
  12. (TCO 3) The main difference between the short run and the long run is that (Points : 4)
  13. (TCO 4) A recession is a decline in (Points : 4)
  14. (TCO 4) The unemployed are those people who (Points : 4)
  15. (TCO 4) GDP is the market value of (Points : 4)
  16. (TCO 4) Nominal GDP differs from real GDP because (Points : 4)
  17. (TCO 6) When the federal government uses taxation and spending actions to stimulate the economy it is conducting (Points : 4)
  18. (TCO 6) Refer to the graph.  What combination would most likely cause a shift from AD1 to AD3? 
  19. (TCO 6) The American Recovery and Reinvestment Act of 2009 included mostly (Points : 4)
  20. (TCO 6) The lag between the time the need for fiscal action is recognized and the time action is taken is referred to as the (Points : 4)
  21. (TCO 5) A decrease in government spending will cause a(n) (Points : 4)
  22. (TCO 5) The long-run aggregate supply curve is (Points : 4)
  23. (TCO 5) Which would most likely increase aggregate supply? (Points : 4)
  24. (TCO 5) Deflation refers to a situation where (Points : 4)
  25. (TCO 6) Dissaving occurs when (Points : 4)
  26. (TCO 7) The M1 money supply is composed of (Points : 4)
  27. (TCO 7) The basic requirement of money is that it be (Points : 4)
  28. (TCO 7) The Federal Reserve System of the U.S. is the country's (Points : 4)
  29. (TCO 7) Which of the following is the most important function of the Federal Reserve System? (Points : 4)
  30. (TCO 7) Money is "created" when (Points : 4)
  31. (TCO 7) During the financial crisis of 2007-2008, the FDIC increased deposit insurance coverage from (Points : 4)
  32. (TCO 7) The purchase and sale of government securities by the Fed is called (Points : 4)
  33. (TCO 7) The Federal Reserve could reduce the money supply by (Points : 4)
  34. (TCO 8) Which country is the United States' largest trading partner in terms of volume of trade? (Points : 4)
  35. (TCO 8) The principal concept behind comparative advantage is that a nation should (Points : 4)
  36. (TCO 8) A tariff is a (Points : 4)
  37. (TCO 8) Tariffs and quotas are costly to consumers because (Points : 4)
  38. (TCO 8) Tariffs and import quotas would benefit the following groups, except (Points : 4)
  39. (TCO 8) Which organization meets regularly to establish rules and settle disputes related to international trade? (Points : 4)
  40. (TCO 9) U.S. businesses are demanders of foreign currencies because they need them to (Points : 4)
  41. (TCO 9) In the balance of payments statement, a current account surplus will be matched by a (Points : 4)
  42. (TCO 9) A trade deficit means a net (Points : 4)
  43. (TCO 9) Foreign exchange rates refer to the (Points : 4)
  44. (TCO 9) When the exchange rate between pounds and dollars moves from $2 = 1 pound to $1 = 1 pound, we say that the dollar has (Points : 4)
  45. (TCO 9) The monetary system for conducting international trade is usually described as a system of (Points : 4)
  46. (TCO 8) a) Explain four problems with the argument that trade protection is needed to protect American jobs.  b) Describe the economic reasons why businesses use off shoring.
  47. (TCO 6) a) Identify the four major tools of monetary policy. b) How can monetary policy address the problem of inflation?


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