Economics Study Guide
A Production Possibility Frontier Diagram Illustrates All of the Following Concepts Except
b. Unlimited wants
A Rightward Shift in the Supply of U.S. Cars Might Be Due to
c. The introduction of cost-saving robots
According to the Text, the Reason to Study Economics
d. All of the above
Along a Given Supply Curve for Eggs
c. Quantity supplied increases as price increases
Among a Given Demand Curve for Corn, Which of the Following Is Not Held Constant
a. The price of corn
Among the Fundamental Concepts in Economics
Read MoreModern Microeconomics: A Comprehensive Guide
1. What is Economics?
Economics is the social science that deals with the production, distribution, and consumption of goods and services and with the theory and management of economics or economic systems. It can also be divided into two major fields:
a. Microeconomics
Explains how the interplay of demand and supply in competitive markets creates a multitude of individual prices, wage rates, profit margins, and rental changes.
b. Macroeconomics
Deals with the explanation of national income and employment.
Read MoreMicroeconomics Principles: Supply and Demand, Market Efficiency, and Government Intervention
What is Economics?
Economics is the study of how society manages its scarce resources.
Scarcity means that society has limited resources and therefore cannot produce all the goods and services people wish to have. This leads to imports, for example, in the agriculture sector.
Efficiency vs. Equity
Efficiency means society gets the most it can from its scarce resources.
Equity means the benefits of those resources are distributed fairly among the members of society.
Ten Principles of Economics
- People face
Business Creation and Implementation Guide
ITEM 12: Business Creation and Implementation
Self-Employment and Employers
Self-Employment: Individuals working independently, without direct reliance on other workers.
Employer: Entities, including individuals or legal persons (public or private), that hire employees to produce goods or provide services.
1. Self-Employment
Reasons for starting a business include personal benefits, following family traditions, and identifying business opportunities.
Production units (firms) require factors of production
Read MoreSupply & Demand: Elasticity, Factors, and Market Analysis
Supply and Demand
Demand
Demand: The quantity of a good or service that consumers are willing and able to buy at various prices within a given time period, other factors besides price held constant.
Note: Changes in price lead to movement along the demand curve; changes in non-price factors lead to shifting of the demand curve.
Factors That Can Cause Demand to Change:
- Taste and Preferences
- Income
- Prices of Related Products
- Future Expectations
- Number of Buyers
Supply
Supply: The quantity of a good or service
Read MoreUnderstanding Personal Finance: A Glossary of Terms and Concepts
Vocab
Banking and Credit
Operating Costs: The costs associated with operating a business.
Fixed Costs: Costs that are constant, such as rent, that you incur every month.
FDIC: Insures bank deposits up to $500,000.00
Variable Costs: Costs that change every month.
Compound Interest: Interest that is calculated on a monthly basis; interest charged on top of both principal and interest.
Competition: Two or more businesses competing for the same customers.
Bank Fee: A charge for services such as an item or checking
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