Test 1 Flashcards
What are the main factors of production?
- Human Resources
- Land
- Capital
- Entrepreneurial Knowledge
What is not considered a resource in terms of factors of production?
Cash
Define natural resources.
Raw materials from nature used in production
List some examples of natural resources.
- Farmland
- Coal
- Water
- Forests
- Minerals
- Oil
- Natural Gas
What is economics primarily about?
Making choices due to limited resources
Define opportunity cost.
The value of the next best alternative given up when making a choice
What occurs when the cost per unit of producing a good decreases?
Economies of scale
Differentiate between microeconomics and macroeconomics.
- Microeconomics: Studies individual economic agents
- Macroeconomics: Examines the economy as a whole
What are the three aspects of the economic system?
- What to Produce
- How to Produce
- Who Gets It
What are the parts of the economic cycle?
- Expansion
- Peak
- Contraction
- Trough
How does supply affect prices when it is short?
Prices typically increase
What does elasticity measure in economics?
How much the quantity demanded of a good changes in response to a price change
Fill in the blank: _______ is money with intrinsic value.
Commodity Money
What are the advantages of digital money like Bitcoin?
- Decentralized
- Low transaction fees
- Security
What is inflation?
The rate at which the general price level of goods and services rises
How does the Federal Reserve influence inflation?
- Adjusting interest rates
- Regulating the money supply
What is the role of the Federal Reserve over banks?
- Sets reserve requirements
- Regulates interest rates
- Provides a lender of last resort
List ways startups can raise money.
- Friends and Family
- Angel Investors
- Venture Capital
What are the purposes of law?
- Maintain order and safety
- Protect individual rights and property
- Resolve disputes
- Establish standards for behavior and commerce
Define bribery.
Offering or accepting something of value to influence decisions
What does intellectual property refer to?
Legal rights that protect creations of the mind
Differentiate between legal, ethical, and moral standards.
- Legal: Compliance with the law
- Ethical: Doing what is right
- Moral: Highest standard, maximizing good
What does corporate responsibility involve?
A company’s commitment to act ethically and contribute to economic development
