Micro Flashcards
Bank
This is often part of a national chain. Most banks offer savings and checking accounts. Banks are places for people to store and obtain their money.
Credit Union
Credit unions are similar to banks but often based on a locality or professional affiliation. Like banks, credit unions are places for people to store and obtain their money.
Payday lender
A payday lender will give people short term loans at very high interest rates. They usually are not a smart financial decision.
Pawn shop
Pawn shops are places people can turn in goods for cash. People are often given only a fraction of the value of the item.
The pawn shop will resell the item to the original owner at a cost. After a certain amount of time pawn shops will sell items to anyone who walks in the door.
Advantages/Disadvantages of
Debit Card
Good -
Accepted many places. Safer than cash since users put in their PIN (personal identification number). Can be used to withdraw cash at ATMs
Bad -
Often charges placed on the card are not refundable/reversible. Users only have access to the cash they have in their bank account.
Advantages/Disadvantages of
Credit card
Good -
Accepted many places. Often has rewards programs where people can earn bonus points.
Bad -
If not paid in full, users will accrue large amounts of interest that they must pay along with the principal.
Advantages/Disadvantages of
Loans
Good -
Get cash or money in advance. Loans allow people to purchase larger items such as cars and houses.
Bad -
Loans accrue interest if they are not paid in full.
Fixed costs vs Variable costs?
Fixed costs are costs that do not change month to month. Examples of fixed costs are: car payments, mortgage payments, and recurring dues.
Variable costs are costs that do change monthly. For example: electricity and gas bills, spending on consumable goods like groceries, and discretionary spending.
Price is driven by?
Supply and demand!
Law of demand and Law of supply?
Law of demand:
states that as the price of a good increases, the less quantity of the good will be demanded. The opposite is also true.
Law of Supply:
states that as the price consumers are willing to pay for a good increases, a greater quantity of the good will be supplied. The opposite is also true.
The rule of opportunity cost?
Because all resources are scarce, all actions have an opportunity cost. It does not include all possible opportunities, though—only the next-best one.
What are the four factors of production:
Does a producer have the land needed to produce their good?
Do they have the labor needed to produce the good?
Do they have the capital to finance their operation and produce their product?
Do they have an entrepreneur who can combine all of these factors and produce a product that can be put to market?
market?
A space in which goods are exchanged. It can refer to a large market with many goods and resources
Pure Competition (Perfect Competition)
A market where products are almost exactly the same and there are infinite competitors. Each market consists of so many firms creating the same product that no additional profit is made and consumers typically go with the cheapest product.
Monopolistic Competition
A market where many firms are present and the distinction of the products results in increased prices that drive innovation.
This can be seen in the market of video games: each video game is distinct. A firm, in the short run, can charge large prices for games that offer a great distinction until a competitor enters. There are few barriers to entry in a monopolistic competition and market advantages are short-lived.
