Economic Basics
A company needs employees, lumber, and machinery to produce furniture.
What are the three categories of economic resources represented in this example?
What is Natural Resources, Human Resources, and Capital Goods?
Complete the statement:
When the price businesses can receive for a product increases, producers generally __________ the quantity they are willing to supply.
What type of economic system is characterized by private ownership of property and businesses making many of their own economic decisions?
What is Market Economy OR Private Enterprise?
What do we call the money remaining after a business pays all of its expenses?
What is Profit?
An employee is honest even when no one is watching and consistently does what they believe is right.
Which ethical principle does this demonstrate?
What is Integrity?
A bakery turns flour, sugar, eggs, and other ingredients into decorated birthday cakes.
What type of utility is the bakery creating?
What is form utility?
A store ordered 500 hoodies, but customers aren't buying them. The store begins dramatically lowering prices to get rid of the excess inventory.
What type of market exists?
What is a buyer's market?
Which economic system tends to adopt new technology and new ways of doing things the slowest because decisions are heavily influenced by customs and practices passed down through generations?
What is Traditional Economy?
Generals Marketplace earns $24,000 in income. It has $8,000 in cost of goods and $11,000 in operating expenses.
What is its net profit?
What is $5,000?
$24,000 − $8,000 − $11,000 = $5,000
You make a mistake while completing a customer's order. Instead of blaming someone else, you admit the mistake and work to correct it.
Which ethical principle are you demonstrating?
What is Accountability?
A school has $5,000 to spend. It chooses to purchase new computers instead of new furniture.
What economic concept describes the furniture the school gave up?
What is opportunity cost?
A disease destroys a large portion of the nation's orange crop while consumer demand for orange juice remains unchanged.
What will most likely happen to the price of oranges?
What is prices will increase?
A private enterprise system gives businesses considerable freedom, but government still has responsibilities.
What is one of the government's most basic roles?
What is Protecting Citizens?
A business launches a new advertising campaign hoping it will increase sales. Instead, sales remain unchanged and the company loses the money it spent on advertising.
Is this a pure risk or speculative risk?
What is Speculative Risk?
What makes an ethical dilemma different from an ordinary problem?
What is an ethical dilemma involves a decision about right and wrong and may involve consequences or harm to yourself or others.
Match each example to the correct economic resource:
A delivery truck, A salesperson, Timber, A factory machine
What is:
Delivery truck → Capital good
Salesperson → Human resource,
Timber → Natural resource,
Factory machine → Capital good?
A business keeps adjusting the price of its product. Eventually, it reaches a price where the quantity consumers want to buy equals the quantity producers want to sell.
What is this price called?
What is Equilibrium Price?
Describe a monopoly market structure.
What is a single company represents the whole industry. It has no competitor, and it is the sole seller of products in the entire market.
A supplier tells a retailer: "We'll give you favorable credit terms, but only if you agree to purchase all of these supplies exclusively from us."
Which federal antitrust law would this type of agreement potentially violate?
What is the Clayton Act?
Identify the cause of the ethical dilemma in each situation:
A. Your friends repeatedly tell you to break a rule so you'll fit in.
B. Your supervisor regularly behaves unethically, and you begin wondering whether you should behave the same way.
What is:
A. Pressure from others
B. Bad role model
What are the 5 economic utilities?
What is: Form, Time, Place, Possession, Information?
A popular sneaker is released in a limited quantity. Thousands of customers want to buy it, but stores quickly begin running out.
Is this more likely to create a buyer’s market or seller’s market, and what is likely to happen to the price?
What is Seller's Market; Prices will increase
In a command economy, why might businesses have less incentive to improve products, lower prices, or develop new ideas?
What is Because there is little or no competition?
What are the two main divisions of the trade industry?
What is Wholesalers and Retailers?
What are the 8 Ethical Principles?
What is Integrity, Trust, Accountability, Transparency, Fairness, Respect, Rule of Law, and Viability?