Economic Basics
What is one key thing to know about wants and needs?
Needs and wants never end.
What is the most common form of business ownership in the U.S.?
Proprietorship / Sole proprietorship
What sector of the economy has the most small businesses?
Service businesses
Define perils.
Events or causes of loss covered by insurance. (Examples: fire, theft, storms, vandalism)
If you rent a property can you get insurance for your personal property?
Yes — renters insurance.
What type of economy limits economic freedom?
Command economy
What is Unity of Command?
Employees report to only one supervisor.
According to the SBA, a small business consists of less than how many employees?
500 employees
If you have a $1,000 deductible and cause $4,500 damage, how much will insurance pay?
$3,500
What are two coverages required in CT?
Liability Coverage, Uninsured/Underinsured Motorist Coverage
What will happen to the price of a product or service if many people want to buy that item?
The price will probably go up.
What is a business goal?
A precise statement of results the business expects to achieve.
What’s the first step in developing a business plan?
Gather and review information.
Personal liability coverage covers what?
Claims involving injuries to people or damage to property caused by you or your family.
What does comprehensive coverage cover?
Property damage losses caused by non-collision events. (Examples: theft, fire, vandalism, weather, falling objects, animals)
Give a short definition of opportunity cost.
The value of the next-best alternative you did not choose.
What’s the difference between policies and procedures?
Policies and procedures are different; policies are guidelines/rules and procedures are the steps followed.
What are some reasons why small businesses are discontinued?
Poor management, lack of money, competition, weak planning, economic problems
What is an assigned risk plan and is the coverage different?
Assigned risk plans help high-risk drivers obtain insurance. Coverage is not fundamentally different, but premiums are often higher.
What are at least 3 factors that determine homeowners insurance premiums?
Location, value of home, deductible amount, condition/age of house, construction materials, claims history, amount of coverage
Define demand.
The quantity of a good or service consumers are willing and able to buy.
In what decade did baby boomers begin working?
1960s
What does persistence mean and why is it important for entrepreneurs?
Persistence means continuing despite obstacles, setbacks, or difficulties; entrepreneurs need it because businesses face challenges and failures.
What is true about pay when it comes to those employed in the service industry?
Service jobs are NOT the lowest-paying jobs in the U.S. economy.
What does 100/300 mean? If 5 people were severely injured, what is maximum payout?
100/300 means $100,000 per injured person / $300,000 per accident total. If 5 people share the maximum payout equally: $60,000 each.