Midterm Study Guide

Basic Definitions. Kalder-Hicks Optimality. Tiebout Competition. Markets. Market Failure. Public Goods. Non-Rivalry & Non-Excludability. Externalities. Incomplete Market with Imperfect Information. Investment Decisions (IRR, NPV, BCR). Payback Period. Relationships between NPV, BCR, IRR, & Discount Rate). Time Value of Money. Compounding vs. Discounting. Future & Present Values. Annuities and Single Cash Flows. Relationships between Interest Rates and Future & Present Values. Equivalent Annual Return. Risk-Free Rate. Capital Budgeting. Budget Stabilization. Budget Formats. Zero-Based Budgeting. Budget Cycle. Private Transactions & Government Interference. Provisions & Productions. Revenue & Expenditure Analyses. Consumer Price Index (CPI). Nominal vs. Real. Stability vs. Volatility. Concentration vs. Diversity (HHI).