Basic Econ Principles
These are the four factors of production
Land, Labor, Capital, Entrepreneur
A new study says green tea will make you live longer. What is the impact on demand.
Two friends want to open a restaurant. Recommend a business structure
Limited Liability Corp
what is the business cycle that sees the GDP fall and unemployment rise
recession
Would Keynesian economics support government spending
yes it would
Your town must choose between a solar farm and housing. What chart should they use to analyze that
PPC (production possibilities curve)
What is the Law of Supply
All things staying the same, as prices increase, producers are willing to supply more
A carpenter earns more money now that he has received his certification. What kind of capital got his there
Human Capital (human capital theory)
A millionaire pays higher percentage in taxes than a low-income worker. What kind of tax is this
Progressive
What is PACED in economics
The decision making model:
Problem, Alternative, Criteria, Evaluation, Decision
You country discovers oil, and your leader alone decides what will be done with it. What system is that
Command
What type of elasticity is it when a luxury sneaker brand raises their prices 20%
elastic
A farmer trades wheat for cash and deposits it for later. What function of money is this?
store of value
What is it called when government spending is rising while the amount of tax revenue stays the same
Deficit
What would the trade barrier possibly be if the U.S. limited steel imports
High tariffs on steel imports
Economic Goals F, E, E, S, G, PS, FE what do these stand for
Freedom, Efficiency, Equity, Security, Growth, Price Stability, Full Employment
Why can monopolies control prices?
no competition, few substitutes, hard to enter the market
Which is liquidated and ready to use. M1 or M2
M1
If unemployment hits 15%, what fiscal policy is needed.
Increase government spending and cut taxes. (Expansionary)
What was an impact of NAFTA
North American Free Trade Agreement
Increased trade between Mexico, Canada, and the US and lowered tariffs
A company buys robots for packaging. Explain some economic impacts of this capital investment.
Increased productivity, lower prices, economic growth
What is it when a business sells similar but different products and they use price and non-price means to sell.
monopolistic competition
What is a mutual fund?
investment managed by professionals where your money is diversified with lower risk.
If unemployment is at a normal rate, but the CPI is 4 or more, what could be done to make sure the economy stays stable
Slightly contractionary policy by slightly raising rates to slow inflation