Part 1 (Lesson 1-8)

Question 1

Who was Adam Smith and why was he important?

Answer 1

He was a Scottish economist and philosopher who was a pioneer in the thinking of political economy and key figure during the Scottish Enlightenment.

Question 2

What is the basic definition of economics

Answer 2

the study of how societies allocate scarce resources to produce, distribute, and consume goods and services

Question 3

What’s Scarcity?

Answer 3

demand for a good or service is greater than the availability of the good or service.

Question 4

What’s Opportunity Cost?

Answer 4

When the difference between the value of the next best alternative forgone and the alternative selected is calculated.

Question 5

List the Seven Economic Principles

Answer 5

1. scarcity
2. opportunity cost
3. marginal thinking
4. incentives matter
5. trade can make everyone better of
6. Markets coordinate trade
7. considering future consequences

Question 6

Four Factors of Production:

Answer 6

Land, Labor, Capital, entrepreneurship

Question 7

Normative/Positive Economics

Answer 7

A positive economic statement is based on facts and data available at the present time and can be proven true or false. A normative economic statement is based on opinions and theories and cannot be proven true or false

Question 8

Market Structures

Answer 8

perfect competition, monopolistic competition, oligopoly, and monopoly.

Question 9

Command Economy

Answer 9

an economy in which production, investment, prices, and incomes are determined centrally by a government.

Question 10

Traditional:

Answer 10

a system that relies on customs, history, and time-honored beliefs.

Question 11

Free Market

Answer 11

one where the laws of supply and demand provide the sole basis for the economic system, without government intervention.

Question 12

Mixed gov

Answer 12

a form of government that combines elements of democracy, aristocracy and monarchy

Question 13

Basic Economic Question

Answer 13

what will be produced, how will it be produced, and how will the output society produces be distributed?

Question 14

Law of Demand

Answer 14

a higher price leads to a lower quantity demanded and that a lower price leads to a higher quantity demanded.

Question 15

Quantity Demand

Answer 15

refers to the specific amount of a good or service that consumers are willing and able to buy at a particular price at a given time

Question 16

Demand Curve

Answer 16

is a graphical representation showing the relationship between the price of a good and the quantity demanded across different price levels

Question 17

Law of Supply

Answer 17

an increase in the price of goods or services results in an increase in the quantity that suppliers make available to the market.

Question 18

Quantity Supplied

Answer 18

the number of goods or services that suppliers will produce and sell at a given market price.

Question 19

Supply Curve:

Answer 19

a graph that shows how a change in the price of a good or service affects the quantity a seller supplies.

Question 20

Utility

Answer 20

the usefulness or enjoyment a consumer can get from a service or good.

Question 21

Law of Diminishing Marginal Utility:

Answer 21

or any good or service, the marginal utility of that good or service decreases as the quantity of the good increases.

Question 22

Perfect Competition

Answer 22

occurs when there are many sellers, there is easy entry and exiting of firms, products are identical from one seller to another, and sellers are price takers.

Question 23

Monopoly

Answer 23

a market structure where a single seller or producer controls the entire supply of a particular good or service, effectively eliminating competition and allowing them to significantly influence market prices due to the lack of viable substitutes.

Question 24

Monopolistic Competition

Answer 24

when many companies offer competing products or services that are similar, but not perfect substitutes.

Question 25

Oligopoly

Answer 25

a state of limited competition, in which a market is shared by a small number of producers or sellers

Question 26

Pros and Cons of investing in the Stock Market:

Answer 26

the potential to earn dividends or an average annualized return of 10%.

Question 27

Sole Proprietorship

Answer 27

you run your own business as an individual and are self-employed.

Question 28

Partnership

Answer 28

the relationship between two or more people to do trade or business.

Question 29

Corporations

Answer 29

a legal entity that is separate and distinct from its owners.

Question 30

Franchises

Answer 30

a type of license that grants franchisee access to a franchisor's proprietary business knowledge, processes, and trademarks

Question 31

Role of Banks

Answer 31

take in funds—called deposits—from those with money, pool them, and lend them to those who need funds.

Question 32

Money (Functions)

Answer 32

a medium of exchange, allowing individuals to trade goods and services with one another.

Question 33

What’s a credit score?

Answer 33

designed to represent your credit risk, or the likelihood you will pay your bills on time.

Question 34

Economic Indicators:

Answer 34

gross domestic product [GDP], consumption, investment, international trade, housing, hospitals, schools, entral government budgets, prices, the money supply, and the balance of payments, quality of life.

Question 35

GDP

Answer 35

Gross domestic product (GDP) is the standard measure of the value added created through the production of goods and services in a country during a certain period.

Question 36

Inflation

Answer 36

the rate of increase in prices over a given period of time.

Question 37

CPI

Answer 37

(CPI) Consumer Price Index is a measure of the average change over time in the prices paid by consumers for a representative basket of consumer goods and services.

Question 38

Gov Regulation

Answer 38

the rules and the enforcement of rules that limit the economic actions of an organization.

Question 39

Structural unemployment

Answer 39

when you lose a job because of technology

Question 40

Seasonal unemployment

Answer 40

when you are a life guard and people dont come in winter cause its cold so people don't usually come

Question 41

Fiscal Policy (What is it meant to combat?)

Answer 41

The use of government spending and taxation to influence the economy.

Question 42

Monetary Policy (What is it meant to combat?)

Answer 42

uses to bank and money to let barrow money. aggregate demand for goods and services, employment, inflation, and economic growth.

Question 43

Expansionary

Answer 43

Expansionary fiscal policy is said to be in action when the government increases the spending and lowers tax rates for boosting economic growth.

Question 44

Contractionary

Answer 44

policy is used to control inflation.

Question 45

The Federal Reserve System, What they do?

Answer 45

It conducts the nation's monetary policy, promotes financial system stability, supervises and regulates financial institutions, fosters payment and settlement system safety and efficiency, and promotes consumer protection and community development.

Question 46

Why do nations trade?

Answer 46

If one country is better at producing one good and another country is better at producing a different good (assuming both countries demand both goods), they should trade.

Question 47

Comparative Advantage

Answer 47

measures opportunity cost instead of actual cost.

Question 48

Absolute Advantage

Answer 48

the ability of an individual, company, region, or country to produce a greater quantity of a good or service with the same quantity of inputs per unit of time.

Question 49

European Union

Answer 49

a unique partnership between 27 European countries, known as Member States, or EU countries.

Question 50

NAFTA

Answer 50

North American Free Trade Agreement , is to eliminate all tariff and non-tariff barriers of trade and investment between the United States, Canada and Mexico.

Question 51

IMF-World Bank

Answer 51

the Bank is primarily a development institution; the IMF is a cooperative institution that seeks to maintain an orderly system of payments and receipts between nations.

Question 52

World Trade Organization

Answer 52

deals with the global rules of trade between nations.