Who's Got the Goods
Name an example of one good and one service.
ex: Sandwich / Haircut
According to the Law of Demand, what happens when the price of a good increases?
Quantity purchased decreases
What are the four types of economic systems?
Traditional, Command, Market, Mixed
What is sales revenue?
The money earned from selling.
What is a household?
Regular people who work in and consume in the economy.
Give an example of a producer and a consumer.
ex:
Producer: Chef
Consumer: Restaurant customer
According to the Law of Demand, what happens when the price of a good decreases?
Customers buy more quantities of a product.
Name three types of economic goals
If I have $100 in sales revenue and spent $60 on the cost of the goods, do I have a profit or loss?
Profit!
$100 - $60 = $40
What is a firm?
Business that produces and employs people in the economy
What are the Four Factors of Production?
Land, Labor, Capital, Entrepreneurship
What are the four expense categories?
Controllable, Non-Controllable, Fixed, Variable
Name an example of a country with a Command Economic System.
North Korea, Venezuela
What is an income statement?
A summary of financial operations over a given period of time
What is the difference between a product market and a factor market?
Product market: Firms sell, households buy
Factor market: Households sell, firms buy
Give an example of land, labor, capital & entrepreneurship.
Ex: Milk, Employee, Freezer, Ice Cream Shop Owner
How do you calculate productivity?
Output / Input
Explain the differences between a Command System and a Market System?
Command System - government control over the economy
Market System - minimal government control over the economy
How do you calculate Net Operating Income?
Gross Profit - Total Operating Expenses
Do goods and services go through the product market or the factor market?
Product Market
How does scarcity impact production?
Producing some goods and services leaves other goods and services unproduced.
Which expense is controllable AND variable?
Materials used / Overtime pay / Office supplies
Give two examples of how government controls can be beneficial to people.
Put these equations in order of when to use them for an income statement:
A.) Selling Expenses + Administrative Expenses
B.) Net Operating Income - (Interest + Taxes)
C.) Sales Revenue - Cost of Products Sold
D.) Gross Profit - Total Operating Expenses
C, A, D, B
What do households get in return for land, labor, capital & entrepreneurship?
Wages, rents, interests, profits