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Write one fixed cost when buying a car
An auto loan payment/ Insurance
In a market economy, how do business owners decide what price to charge for a product?
By analyzing what buyers are willing to pay and adjust prices to maximize profit and stay competitive.
If you take out a loan for school, why do you have to pay back more money than you originally borrowed?
You have to pay back more because of interest and fees.
If you lose a physical store receipt, how can your online bank statement help you prove you bought the item?
An online bank statement proves a purchase occurred by showing the exact date, merchant name, and amount.
If the price of leather goes up significantly, how will this impact the supply curve for leather jackets?
shift to the left. This indicates a decrease in supply.
Name three variable expenses when buying a car
Fuel, Tires, Maintenance, and Repairs
Why is there very little division of labor or specialization in a traditional economy?
production is driven by customs, history, and basic subsistence.
What is the difference between a student loan and a scholarship ?
The difference is that scholarships are "free money" awarded for merit or need that you never have to pay back. Student loans are borrowed funds that must be repaid in full.
When you put your savings into a bank account, what does the bank actually do with your money while it sits there?
The bank borrows your funds to generate profit.
A massive heatwave hits the city. What will happen to the demand curve for ice cream, and which way will it shift?
A massive heatwave will increase the demand for ice cream, causing the demand curve to shift to the right.
Why does a brand new car lose a large percentage of its resale value the moment it is driven off the dealership lot?
A brand new car instantly loses value the moment it is driven off the lot because it officially becomes a "used" vehicle
If the government sets the price of bread too low, what happens to the lines outside grocery stores?
If the government sets the price of bread too low, it creates a market shortage.
If a high school senior takes a two-year gap year to work a minimum-wage job before starting college, what is the long-term opportunity cost regarding their lifetime career earnings?
It permanently lowers lifetime earnings by roughly $90,000 to $100,000.
When you swipe a debit card, where does the money come from compared to when you use a credit card?
A debit card pulls money directly from your existing checking or savings account. In contrast, a credit card uses borrowed funds.
What does it mean when the number of itms sellers want to sell perfectly matches the number of items buyers want to buy?
market equilibrium (No Shortages or Surpluses)
How do private banks use a buyer's credit score to determine their auto loan interest rate and monthly payment?
Private banks use a buyer's credit score to assess risk. A higher score means lower risk, lower interest rate, and a smaller monthly payment.
Why do command economies struggle to produce high-quality consumer goods like smartphones or fashion clothing?
They lack the competitive pressures, price signals, and flexible supply chains that drive continuous improvement and rapid response to consumer tastes.
Why is a $100,000 student loan for a degree in software engineering considered a different financial risk than the same loan amount for a degree in visual arts?
Vast differences in starting salaries primarily drive this; student loans for software engineering represent a manageable investment.
Why does a bank pay you a small amount of extra money (interest) just for keeping your savings in their bank?
. Since your money lets them generate revenue, they pass a small portion of those profits back to you as a reward for letting them use your funds.
On a standard economics chart, which line goes down from left to right the supply curve or the demand curve?
Demand curve.
If a buyer fails to make their monthly car payments in a pure market economy, why does the lender have the legal right to repossess the vehicle?
a lender has the legal right to repossess a vehicle because the car acts as collateral for a secured loan.
How does the profit encourage businesses to conserve scarce resources efficiently?
Profit encourages businesses to conserve scarce resources through the fundamental mechanism of cost reduction.
Why do governments heavily subsidize public universities with taxpayer money? What positive externalities does a highly educated workforce provide to the broader economy?
ensure widespread access to higher education, which drives economic growth and social mobility.
If a commercial bank completely fails and shuts down, why are regular depositors protected from losing their money?
government-backed deposit insurance.
If demand for a product goes up while the supply stays exactly the same, what will happen to the equilibrium price?
The equilibrium price will increase.