vocab
scarcity
the inability to satisfy all wants at the same time- therefore everyone has to make choices
List the 3 different types of business models in order of lowest risk to highest risk.
Corporation, Partnership, sole proprietorship.
What are 2/3 ways the government promotes competition?
1- enforces anti-trust legislation
2-engages in global trade
3- support business start ups
Name 2/4 reasons why nations trade in a global economy?
1) to get goods/services they cant produce/obtain efficiently themselves.
2) to buy goods/services at lower cost/opportunity cost
3)to sell goods/services to other countries
4) to create jobs.
Explain how Banks make money?
Individuals/businesses deposit money into banks and earn interest which is then used to loan out to other individuals/businesses and those loans have an interest rate. Therefore banks lend out people's savings for a cost.
traditional economy
economic decisions are based on customs and historical precedent
List the 3 types of economies in order from most government involvement, to lease government involvement.
Command economy, Mixed Economy, Free market economy
FTC and what does it do?
Federal Trade Commission- makes rules about communication
In the Economic flow model, How do individual households and businesses interact?
individuals- own resources of production- sell it to businesses for an income.
Businesses buy resources of production from individuals to produce and make profit, to use that profit to make more profit.
What can the government increase to speed up the economy- name 3 things.
increase government spending,
decrease government borrowing
decrease taxes
mixed economy
Individuals and businesses are owners and decision makers for the private sector. Government is owner and decision maker for the public sector
What are the 4 resources/factors of production and an example of each.
Human
Capital
Entrepreneurship spirit
Federal Communications Commission- and what does it do?
Federal trade commission- makes rules about buying/selling of goods/services to protect consumer from unfair trade.
what 2 examples of public goods that the government provides?
schools, roads, military...
what can the government do to slow down the economy?
increase government borrowing
decrease government spending
increase government taxes
consumer sovereignty
Consumers determine through purchases what goods and services will be produced
What are the 3 Basic Economic Questions-
What will be produced?
Who will produce it?
For whom will it be produced?
EPA and what does it do?
Environmental Protection Agency- protects the environment by making rules about pollution/toxic waste/water quality...
What is the government's role in the economic flow model?
government taxes individuals and businesses and uses those taxes to provide public goods and services.
what amendment gives congress the power to tax
16th
Economics is the study of ______ .
choices
what determines price in a free market?
what is the federal reserve system (The FED) and what are 2/4 of it's roles in our economy?
our nation’s central bank
maintain value of our national currency, regulate banks to ensure safety of deposits, manages amount of money in the economy to keep inflation low/stable, acts as the federal government's bank.
Why is competition good? 2 reasons
increases quality
decreases price
If John decides to take a risk and start his own business by starting his own restaurant, brainstorm at least 2 good opportunity costs.
money he could get while not working his own business.
More free time working a 9-5.
Less risk and responsibility for own business.