Early Economics
What is another name of subsistence economy and which set of people practiced this economy?
Direct Production. The nomadic people practiced subsistence economy.
State three of the six characteristics of money
1. Generally acceptable
2. Relatively Scarce
3. Easily divisible
4. Homogenous in nature
5. Fairly durable
6. Portable
What are the two other names of a free market system?
Free Enterprise or Laissez Faire
What are the four functions of a business?
1. To produce goods and services
2. Creating jobs and training employees
3. Purchase goods and services for resale
4. Raise money by borrowing
Explain the term scarcity
The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.
Why are tools less expensive for specialization?
The job needed to be done is less complex
State the four functions of Money
1. As a medium of exchange
2. As unit of account - pricing
3. As a store of value – stored for future use eg. savings
4. Means of deferred payment- makes credit possible.
Which four economic systems did we study?
Subsistence Economy, Planned Economy, Free Market Economy & Mixed Economy
Digicel is an example of which business organization?
Multinational
What is a limited legal tender?
Money accepted as legal tender only up to a certain limit.
True or False. Occupation immobility is an advantage of specialization.
False.
What is the difference between a money order and a cheque ?
Unlike regular cheques, money orders are prepaid. (They’re backed by large agencies or corperations instead of individuals)
Why is competition among businesses an advantage of a free market?
Answer 1: Competition leads to innovation and motivation of businesses.
Answer 2 : Competition among businesses will result in increased quality of output and lower prices.
True or false? The franchisee of a franchise can only pay royalties to their franchiser if the brand becomes big and earns profit.
False
Define the term liquidate?
This occurs when a business sells off its assets to repay debts
Explain the disadvantage “store of value” of Bartering
Some goods are perishable and cannot be stored for a long time.
What is the difference between tele-banking and internet banking?
Tele banking involves the use of a phone to get bank services while internet banking involves the use of internet to get bank services.
Name three of the four decision makers in a mixed economy
Consumer, Firm, Factory Owner, Government
Who owns the public and private sector and what are the main objectives of each?
Public is owned by the government. Private is owned by businesses. Main objective of a public sector is to provide essential goods and services for the citizens while private sector is to earn profit.
What is a merit good?
These are goods that when used contributes a benefit to the wider society
The six different ways in which specialization occurs
By Product, By Process, By Firm, By Industry, By Region, By Nation
Who were the first figure of authorities to issue “money” and how did they cause the economic activity to increase?
Goldsmiths. They issued more loans which forced them to make more money. Because of this the amount of money exceeded the amount of gold.
State three of the four economic questions which must be answered by managers of an economy.
1. What to produce?
2. How much to produce?
3. What methods of production are to be used?
4. How will goods and services be distributed?
Explain the difference between the limited liability partnership and unlimited liability partnership
Limited Liability Partnership - at least one partner must have unlimited liability.
Unlimited Liability Partnership - All partners have unlimited liability
Explain the term prospectus
This is an invitation to the public to buy shares in a public company.