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EPF Midterm Study Guide

most terms are in flashcards, this is for things that need to be more detailed

Calculating Income

disposable/discretionary calculating

finding net income using federal, state, FICA taxes

taxable income calculating

  1. Find disposable income then subtract deduction to get taxable income

Determinants of Demand

(increase/decrease is referring to demand)

  • Changes in related goods

    • Increase: price of related good decreases, cost of substitute increases

    • Decrease: price of related good increases, cost of substitute decreases

  • Government regulations

    • Increase: products cost less to make

    • Decrease: products cost more to make

  • Changes in income

    • Increase: when more consumers have more income

    • Decrease: when consumers have less income (typically wants go down)

  • Changes in expectations of value

    • Increase: expected value of good to increase

    • Decrease: expected value of good to decrease

  • Changes in taste

    • Increase: consumer’s favor a product

    • Decrease: consumer’s don’t like the product

  • Changes in number of consumers

    • Increase: more buyers means more demand, overall

    • Decrease: less buyers, less demand

Economic Systems and Questions

3 basic economic questions that all systems must answer:

  • What will be produced?

  • For whom will it be produced?

  • How will it be produced?

Types of economic systems:

  • Traditional

    • What/for whom/how: tradition/family

    • based on family or traditional beliefs and ways of doing things

  • Mixed/market

    • What: consumer decides

    • For whom: both (producer (who you are targeting, price) and consumer (how much money you make))

    • How: producers

    • combine some degree of government control or oversight with a market economy (freedom to producers and consumers to rely on supply and demand to cause competition and innovation)

  • Command

    • What/for whom/how: government decides

    • the government owns the factors of production and makes to economic decisions for society

Decision Making and Financial Plan

  • Five steps in the Rational Decision Making Process (in order)

    1. Define the problem

    1. List the alternatives

    2. Understand your criteria

    3. Evaluate alternatives on basis of your criteria

    4. Make a decision

  • Identify the three parts of a financial plan in order

    1. Looks at current financial situation

    2. Goals for the future

    3. Plans to meet their goals

AR

EPF Midterm Study Guide

most terms are in flashcards, this is for things that need to be more detailed

Calculating Income

disposable/discretionary calculating

finding net income using federal, state, FICA taxes

taxable income calculating

  1. Find disposable income then subtract deduction to get taxable income

Determinants of Demand

(increase/decrease is referring to demand)

  • Changes in related goods

    • Increase: price of related good decreases, cost of substitute increases

    • Decrease: price of related good increases, cost of substitute decreases

  • Government regulations

    • Increase: products cost less to make

    • Decrease: products cost more to make

  • Changes in income

    • Increase: when more consumers have more income

    • Decrease: when consumers have less income (typically wants go down)

  • Changes in expectations of value

    • Increase: expected value of good to increase

    • Decrease: expected value of good to decrease

  • Changes in taste

    • Increase: consumer’s favor a product

    • Decrease: consumer’s don’t like the product

  • Changes in number of consumers

    • Increase: more buyers means more demand, overall

    • Decrease: less buyers, less demand

Economic Systems and Questions

3 basic economic questions that all systems must answer:

  • What will be produced?

  • For whom will it be produced?

  • How will it be produced?

Types of economic systems:

  • Traditional

    • What/for whom/how: tradition/family

    • based on family or traditional beliefs and ways of doing things

  • Mixed/market

    • What: consumer decides

    • For whom: both (producer (who you are targeting, price) and consumer (how much money you make))

    • How: producers

    • combine some degree of government control or oversight with a market economy (freedom to producers and consumers to rely on supply and demand to cause competition and innovation)

  • Command

    • What/for whom/how: government decides

    • the government owns the factors of production and makes to economic decisions for society

Decision Making and Financial Plan

  • Five steps in the Rational Decision Making Process (in order)

    1. Define the problem

    1. List the alternatives

    2. Understand your criteria

    3. Evaluate alternatives on basis of your criteria

    4. Make a decision

  • Identify the three parts of a financial plan in order

    1. Looks at current financial situation

    2. Goals for the future

    3. Plans to meet their goals

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