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Economics can best be defined as
Efforts to satisfy unlimited wants with limited resources
What is the law of demand?
If price goes up, demand goes down
Why do companies merge?
to earn more $$
eliminate competition
be more efficient
How does someone increase their human capital?
Education, training, experience
What is an effect of having a low credit score?
Higher rates on loans
Less likely to get a loan
What motivates people to start their own business?
MONEEEEEEE
Which of the following factors may cause a change in supply?
Input Costs Consumer Tastes
Consumer Expectations Inferior goods
Input Costs
What is a disadvantage of a partnership?
Shared profits, potential for conflict
FICA is taken out of a worker’s paycheck to provide
(1) unemployment pay in case the worker is fired
(2) Social Security for retired workers
(3) investments into the work’s 401 (k) plan
(4) Worker’s Compensation in the event of an injury
(2) Social Security for retired workers
What is diversification?
Making several different types of investments to reduce risk
What are the four factors of production?
Land
Labor
Capital
Entrepreneurship
What occurs if buyers want to purchase more than producers want to sell at the current price?
What type of merger is occurring if McDonalds merges with Ore-Ida potatoes?
Vertical
Jimmy was just released from prison (it was murder) and is now looking for a job. What type of unemployment is Jimmy (the murderer) facing?
Frictional
How does inflation affect people?
decreases the value of the dollar
increases the costs of goods
Which economic system has the most freedom of choice?
Capitalism/Free market
The price of hot dogs decreases, which leads to a higher demand for hot dog buns. Which factor is impacting demand?
Complements
Which market structure does this describe: many companies selling similar, but not identical products?
Monopolistic Competition
What is a drawback of the government raising minimum wage too quickly?
Loss of hours, jobs
Increase in the cost of goods
Inflation
The longer you have to invest, the _________ risk you can take
MORE
If you buy a new pair of sneakers for $115, what is the opportunity cost of your decision?
What is an example of a price ceiling?
Rent Control
Patents, large startup costs, and limited access to resources are all barriers to entry which allow for __________________ to form?
Monopolies
What is collective bargaining?
when union representatives negotiate a contract with managment
How will consumers be impacted if the Federal Reserve raises interest rates?
the cost of borrowing money will go up