Economic Decisions
when the demand for a good or service is greater than the availability of the good or service
What is Scarcity?
a thin rectangular piece of plastic or metal issued by a bank or financial services company, that allows cardholders to borrow funds with which to pay for goods and services with merchants that accept cards for payment
What is a credit card?
an agreement between you and a lender that allows you to borrow money to purchase or refinance a home and gives the lender the right to take your property if you fail to repay the money you've borrowed
What is a mortgage?
the study of what is likely to happen (tendencies) when individuals make choices in response to changes in incentives, prices, resources, and/or methods of production
What is Microeconomics?
the belief that anyone, regardless of where they were born or what class they were born into, can attain their own version of success
What is the American Dream?
Define Opportunity Cost
The value of the next best option
a number assigned to a person that indicates to lenders their capacity to repay a loan
What is a credit score?
an initial up-front partial payment for the purchase of expensive items/services
What is a down payment?
the branch of economics that studies the behavior and performance of an economy as a whole
What is Macroeconomics?
If the demand for apples goes up, what happens to the price?
It goes up
What is the relationship between Scarcity and Opportunity Cost
scarcity means there's limited resources forcing you make a choice which result in a opportunity cost of not choosing the other resources
the smallest amount your credit card issuer will accept toward your credit card balance each month
What is a minimum Payment?
2 cons of buying a used car
-low prices
-low interest rate
-quicker pay off
the inputs needed for the creation of a good or service, these include labor, entrepreneurship, and capital
What is Factor of Production?
the current nutrition guide published by the USDA's Center for Nutrition Policy and Promotion, and serves as a recommendation based off the Dietary Guidelines for Americans
What is My Plate?
the process of identifying alternative courses of action and selecting an appropriate alternative in a given decision situation
Economic Decisions
What is the difference between Late Payment Penalty and Return Payment Penalty?
Late payment penalty is a charge consumers pay when they fail to make a payment on a debt such as a loan or a credit card.
Return payment penalty is a charge issued by a financial institution or another creditor when a consumer bounces a payment or when the payment is not valid
the basic services your home, apartment, or business needs to keep it comfortable and functioning properly (water, electricity, etc)
What is utilities?
Where does federal budget go?
The U.S. Treasury divides all federal spending into three groups: mandatory spending, discretionary spending and interest on debt. Together, mandatory and discretionary spending account for more than ninety percent of all federal spending, and pay for all of the government services and programs on which we rely.
One advantage and disadvantage of inflation.
Advantages: Enables economic growth, might prompt adjustments to wages, benefits those who took out loans
Disadvantages:If wages don't keep up, people will struggle, Creates uncertainty and lower stability
Relationship between Scarcity and Economic Decisions
Scarcity requires choice. People must choose which of their desires they will satisfy and which they will leave unsatisfied.
Explain how credit score works.
a number between 300–850 that depicts a consumer's creditworthiness. The higher the score, the better a borrower looks to potential lenders. A credit score is based on credit history: number of open accounts, total levels of debt, and repayment history, and other factors
Define Needs Vs Wants. Provide an example for each.
wants: desires for goods, services, feelings, and other things we would like to have but do not need.
needs: things we must have to survive, such as food, water, and shelter. save: to keep or put aside for future access
Explain Supply and Demand.
relationship between the quantity of a commodity that producers wish to sell at various prices and the quantity that consumers wish to buy
the total monetary or market value of all the finished goods and services produced within a country's borders