CIE3M Unit Test #2: Consumer Behaviour and Personal Financial Planning
Theme A: Consumer Behaviour
Preparation and Debriefing
The following is a detailed outline of what will be included on the quiz and what will be expected
of the student. To successfully complete this unit test the student must be able to:
- explain the concept of "elasticity";
- illustrate both elastic and inelastic demand curves;
- discuss the factors that might affect the elasticity of demand;
- calculate elasticity (specifically, "price elasticity of demand");
- define and explain any of the following concepts:
- elasticity of demand,
- "elastic" demand,
- "inelastic" demand, and
- "unitary" elastic demand.
- define and explain the "law of diminishing marginal utility";
explain and apply the "utility maximization principle" (an application of the "equimarginal principle");
- explain what is meant by the "consumer surplus"
- calculate the "consumer surplus."
Theme B: Personal Financial Planning
The following is a detailed outline of what may be included on the term exam and what will be expected
of the student. To successfully complete material on the exam related to this material, the student must be able to:
explain some of the basic priniciples underlying sound investment strategy, including:
- paying yourself first,
- investing for long-term gain,
- utilizing the power of compound interest, and
- the Rule of 72.
define and explain the significance of any of the following concepts related to stocks:
- capital gains,
- preferred stock,
- common stock.
define and explain the significance of any of the following concepts related to the stock market:
- stock brokers,
- primary market,
- secondary market,
- initial public offering (IPO),
- stock markets (ex. NYSE, NASDAQ, TSX),
- stock indices (ex. TSX composite, Dow Jones Industrial Average),
- bull market,
- bear market.
- be able to explain the difference between the "real economy" and the "financial economy," and explain how each of these two economies can impact the other;
define and explain the significance of any of the following concepts related to short-term investment strategies:
- market order,
- stop order,
- buying on margin.
- define and explain the significance of any of the following concepts related to long-term investment strategies:
- buy and hold,
- dollar-cost averaging.
define and explain the levels of risk and reward associated of any of the following investment opportunities:
- mutual funds,
- certificates of deposit / guaranteed investment certificates
- real estate,
- discuss the relationship between interest rates and bond values.
- recognize when a bond would be sold at a "discount" or a "premium."
- perform the calculation necessary to sell a bond at either a discount or a premium.
- discuss the relationship between risk and reward in investment planning.
- Explain and distinguish between the following terms and concepts related to taxtion:
- progressive, regressive, and proportionate tax systems,
- "tax brackets" and "tax rates," and
- marginal tax rate.
- discuss how the Canadian government encourages independent savings for education and retirement by allowing citizens to reduce their taxable income or shelter investment growth with registered savings plans.
- discuss the purpose, advasavingntages and disadvantages associated with any of the following government savings programs:
- Registered Education Savings Plans (RESP),
- Canada Education Savings Grant (CESG),
- Registered Retirement Savings Plans (RRSP), and
- Tax-Free Savings Accounts (TFSA)
Note: After you receive your marked test, you may wish to consult the online key
to my marking symbols.
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