Supply and Demand
Which of the following best describes demand?
The amount consumers are willing and able to buy at different prices
Limited Resources
What is our biggest economic problem in society?
What is a business?
An organization that provides goods or services to consumers.
What is economics?
The study of how individuals behave when it comes to satisfying their unlimited wants and needs with limited resources.
What does GDP measure?
The total value of final goods and services produced within a country during a specific period.
Which statement accurately defines supply?
The amount businesses are willing and able to produce at different prices
Role of a Business
To help people improve their lives by providing goods and services they value more highly than their other options
What is one main reason businesses exist in society?
To provide goods and services that create value for consumers
What is the definition of a market?
Any place where buyers and sellers meet to exchange goods and services
During which stage of the business cycle is the economy experiencing growth and real GDP is generally increasing?
Expansion
According to the Law of Supply, what happens when the price of a good increases?
Producers create more of the product
Consumer
An individual who buys goods and services from businesses
What are the two main types of products that businesses provide to consumers?
Goods and Services
Which of the following best describes opportunity cost?
The value of the next best alternative
hat is the name for the lowest point of the business cycle, when economic activity has reached its bottom before beginning to recover?
Trough
What is the primary relationship described by the Law of Demand?
As price increases, demand decreases
Services
Work that businesses perform for consumers
Why do businesses need to understand what consumers want and need?
To create value and attract customers, which can help the business succeed and earn a profit.
The activity of producing and selling goods or services and making them available to all consumers.
What is Economic Activity
If real GDP decreases for a sustained period and businesses experience lower sales, reduced production, and may lay off workers, what stage of the business cycle is the economy likely experiencing?
Contraction/Recession
What occurs at the equilibrium price?
The quantity demanded equals the quantity supplied
Profit
The money businesses get to keep after paying off expenses. Profits are a measure of the value it is created in society
Why is profit important to a business?
Profit helps a business cover expenses, stay operating, and grow while showing whether consumers value what the business provides.
What is the economic problem caused by unlimited wants but limited resources?
Scarcity
How can a decrease in real GDP affect small businesses?
It can lead to lower sales and profits because consumers may spend less. Which could lead to the company closing the business.