Econ Test

Life, Work, Cultural, Social, Demographic

5 Values

Need

you need it to survive

Want

a desire, you can live without it

life span

time between life and death

life cycle

events between life and death

short term goal

Things you want to complete in less than a year

long term goal

Things you want to complete in more than a year

impulse buying

buying without thinking

rational decision making

thinking through and spending time before making a decision

5’s

Specify, Search, Sift, Select, Study

Specify

Determine and identify

Search

Gather information

Sift

Look at options

Select

Make a choice

Study

Reflect, see if you made the right decision

Opportunity Cost

Value of the next best things you’re giving up when making decisions

Buyer’s Remorse

Regretting a purchase

Human resources

Things within people

Ex. Love, Knowledge

Non-human resources

Things you can physically hold

Ex. Book, money

Traditional Economy

Economics are based on customs and beliefs. People make, hunt, gather, grow, trade. Traders are our WHO.

Command Economy

Government makes decisions and owns 100%. Government decides WHAT, WHO, HOW

Market Economy

Guided by citizens, no government. Free Enterprise. Businesses decides WHO.

Mixed Economy

Market+Command, businesses decides BUT follow government rules. Many/all modern day economies are this way.

Free enterprise

Competition between companies

If the demand increases…Price ___, workers try to ___ supply

Increase, increase

Demand decreases…Price ____, workers __ supply

Decrease, cut

Law of Supply

Producers want to offer more of a product at a higher price

Law of Demand

Consumers will demand more at a less price

Equilibrium

Price equal to demand

Antitrust Laws

Prevents monopolies, price-fixing, and trade restaurants

Public Safety & Wellbeing Laws

Fair labor practices, equal opportunity act, safety, product labeling

Fiscal Policy

Taxing and spending to influence the economy

Monetary Policy

Open market, discount rate, reserve requirements

Open Market

Buying and selling treasury

Discount rate

Also known as bank ___, interest charged on bank loans

Reserve requirements

Amount of money banks hold in these.

Recession

A period of economic slowdown and unemployment

Inflation

Rising prices + increase of money flowing in the economy

Gross Domestic Product (GDP)

Total $ value of all goods and services in 1 year

Consumer Price Index (CPI)

Measure of change in price in 7 different categories

Profit motive

Motivation to make profit

To increase profit…