EPF Midterm Study Guide
most terms are in flashcards, this is for things that need to be more detailed
disposable/discretionary calculating
finding net income using federal, state, FICA taxes
taxable income calculating
Find disposable income then subtract deduction to get taxable income
(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
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
Five steps in the Rational Decision Making Process (in order)
Define the problem
List the alternatives
Understand your criteria
Evaluate alternatives on basis of your criteria
Make a decision
Identify the three parts of a financial plan in order
Looks at current financial situation
Goals for the future
Plans to meet their goals
most terms are in flashcards, this is for things that need to be more detailed
disposable/discretionary calculating
finding net income using federal, state, FICA taxes
taxable income calculating
Find disposable income then subtract deduction to get taxable income
(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
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
Five steps in the Rational Decision Making Process (in order)
Define the problem
List the alternatives
Understand your criteria
Evaluate alternatives on basis of your criteria
Make a decision
Identify the three parts of a financial plan in order
Looks at current financial situation
Goals for the future
Plans to meet their goals