Our Economic World

Question 0

What are the four categories of limited economic resources?

Answer 0

Land, capital, labor, & entrepreneurial ability.

Question 1

What are the two basic principles that the study of economics rests on?

Answer 1

1. The wants of society & individuals are unlimited.

2. The resources of society are limited.

Question 2

Land -

Answer 2

Refers not only to physical land but also to the natural resources that we use including lumber, materials, oil & so on.

Question 3

Capital -

Answer 3

Refers to all of the manufactured tolls and aids used to produce consumer goods. Includes tools, machinery, & other items that businesses use to make products.

While we often think of capital as money, economists do not view money as an economic resource as it doesn’t produce anything by itself.

Question 4

Labor -

Answer 4

Refers to the physical & mental work necessary to create goods & services.

Question 5

Entrepreneurial ability -

Answer 5

Refers to the human abilities to find resources, make business decisions, and create new products. Requires specific skill & ability to create & run a business producing products.

Question 6

What does it mean by economists assuming rational behaviors?

Answer 6

That they predict we will make different choices in different circumstances as the costs & benefits to us change.

Question 7

Rational behavior -

Answer 7

People will make different choices at different times in their lives.

Question 8

What are some things you should consider in financial planning ?

Answer 8

1. We need to plan ahead for the times in which our resources may decrease.
2. Take into account our limited resources & decide which items to buy & which to do without.

Question 9

Why do companies give out “freebies”?

Answer 9

To lure in new costumers & keep them & to get us to buy more.

Question 10

Opportunity costs-

Answer 10

the resources, the labor, & the cost the store has to put into a product in order for you to get it free.

Question 11

How can “freebies” be problematic to other countries?

Answer 11

Because the wealthier countries take essential resources from poorer countries to make luxury items. This forces the ordinary citizens of a poor country to make do with less resources.

Question 12

What is one major influence on the economy in any country ?

Answer 12

The policies that the government develops.

Question 13

Fiscal policy-

Answer 13

Refers to the governmental allocation & collection of money within the state.

Question 14

What are the three different stances that a government can take in regards to fiscal policy ?

Answer 14

Neutral- a neutral stance indicated a balanced economy. In most cases, this stance leads to more tax revenue for the government.

Expansionary- this stance implies that the government is spending or allocating more money than it collects.

Contractionary- this stance implies that the government is collecting more money than it spends or allocates.

Question 15

How must the government stay up & running?

Answer 15

By collecting money.

Question 16

What is the most common way to collect money ?

Answer 16

Taxes.

Question 17

What are other ways the government can collect money?

Answer 17

Borrowing from its population or others in the form on governmental bonds or selling off some of their assets like land or resources like minerals.

Question 18

How does fiscal policy impact individuals within a country ?

Answer 18

Through the taxation that a government uses to raise money for itself. These taxes directly impact our financial situations since its money taken from our income.

Question 19

What influences how much money we pay to the government ?

Answer 19

The amount of taxes we pay, the laws surrounding deductions

Question 20

How do we benefit from taxes?

Answer 20

Having roads to drive on & protection through the enforcement of laws

Question 21

Stock market-

Answer 21

A place (physically or virtually) where stocks(shares in a company) are bought & sold.

Question 22

Stock-

Answer 22

Shares of ownership in a company, entitles the owner to that proportion of the order to generate income.

Question 23

Trading-

Answer 23

Buying & selling of stocks.

Question 24

Open outcry-

Answer 24

a sort of auction for stocks in which traders verbally submit their offers.

Question 25

Why do stock markets exist?

Answer 25

Provides a company with a way to raise money.

Produces jobs for many individuals.

Generates more money for companies than they invest.

Question 26

New York Stock Exchange-

Answer 26

Physical stock market

Question 27

Marginal-

Answer 27

Means Additional

Question 28

Are “free” items really free?

Answer 28

It costs the company out of their advertising fund, it costs the laborers, & it costs the costumers of the company bc it puts the prices into the items.

Question 29

How does the government collect money?

Answer 29

Taxes, bonds, selling resources.

Question 30

Does the NASDAQ feature an open out cry?

Answer 30

No