Economics Review Fall 2013. Economics Review Who wrote “The Wealth of Nations” ? Who wrote “The Wealth of Nations” ?

Economics ReviewEconomics Review

Fall 2013Fall 2013


Who wrote “Who wrote “The Wealth of The Wealth of Nations”Nations” ? ?


Adam SmithAdam Smith

Economics ReviewEconomics Review Under modified capitalism in the United Under modified capitalism in the United

States, which of the following is done by States, which of the following is done by the government?the government? {Could be more than one}{Could be more than one}

Enforcer of laws and contractsEnforcer of laws and contracts Maintainer of competitionMaintainer of competition Distributor of resourcesDistributor of resources Protector of workers and consumersProtector of workers and consumers Corrector of market failuresCorrector of market failures Provider of goods and servicesProvider of goods and services Stabilizer of the economyStabilizer of the economy Regulator of businessesRegulator of businesses

Economics ReviewEconomics Review Enforcer of laws and contractsEnforcer of laws and contracts Maintainer of competitionMaintainer of competition Protector of workers and Protector of workers and

consumersconsumers Corrector of market failuresCorrector of market failures Provider of goods and servicesProvider of goods and services Stabilizer of the economyStabilizer of the economy Regulator of businessesRegulator of businesses


A business that is owned and A business that is owned and managed by one person is a managed by one person is a (an) ____________ .(an) ____________ .


Sole ProprietorshipSole Proprietorship


When the market is dominated When the market is dominated by a few large, profitable firms, it by a few large, profitable firms, it is called ____.is called ____.


OligopolyOligopoly

Economics ReviewEconomics Review A person cannot be required to join a A person cannot be required to join a

union as a condition of getting or union as a condition of getting or keeping a job if there are keeping a job if there are ________________ Laws________________ Laws


Right to Work LawsRight to Work Laws


If you are denied credit, you If you are denied credit, you have the right to –have the right to –

see your credit files (report)see your credit files (report) get a credit cardget a credit card fill out a credit application fill out a credit application throw a fitthrow a fit


see your credit files (report)see your credit files (report)

Economics ReviewEconomics Review What are the phases of the business What are the phases of the business

cycle? cycle?


ExpansionExpansionContractionContractionPeakPeakTroughTrough


Concentrating on producing Concentrating on producing what a country can do best and what a country can do best and importing other goods is defined importing other goods is defined as – as –


specializationspecialization


The price at which currency is The price at which currency is bought and sold is known as –bought and sold is known as –


exchange rateexchange rate


What is an association that What is an association that operates to benefit a cause or operates to benefit a cause or charity?charity?


Non-profit OrganizationNon-profit Organization

Economics ReviewEconomics Review Would any of the following be an Would any of the following be an

advantage to a franchise?advantage to a franchise? National product recognitionNational product recognition If the business goes bankrupt, the If the business goes bankrupt, the

owner owes nothing.owner owes nothing. No one can sue the store.No one can sue the store. profits are tax free.profits are tax free.


National product recognitionNational product recognition..


In which business organization In which business organization would the owner have total would the owner have total liability and receive all of the liability and receive all of the profits?profits?


Sole ProprietorshipSole Proprietorship

Economics ReviewEconomics Review At which point (s) along the PPF can At which point (s) along the PPF can

this society produce efficiently?this society produce efficiently?

Economics ReviewEconomics Review Points A and BPoints A and B

Economics ReviewEconomics Review At which point along the PPF does At which point along the PPF does

the society under produce?the society under produce?

Economics ReviewEconomics Review Point DPoint D What could cause this?What could cause this?

Economics ReviewEconomics Review Can this society produce at Point CCan this society produce at Point C

along the PPF Curve?along the PPF Curve? How?How?

Economics ReviewEconomics Review By adding new technology or By adding new technology or

resources in an economyresources in an economy


What business organization What business organization has the most regulations and has the most regulations and is difficult to start up?is difficult to start up?


CorporationCorporation


What kind of government aid is What kind of government aid is provided to retired and disabled provided to retired and disabled workers as well as their workers as well as their survivors?survivors?


Social SecuritySocial Security


What is the largest source of tax What is the largest source of tax income for the federal income for the federal government?government?


Personal Income tax Personal Income tax


What are the economic goals of What are the economic goals of the United States?the United States?


Economic EquityEconomic EquityEconomic GrowthEconomic GrowthEconomic FreedomEconomic FreedomEconomic SecurityEconomic SecurityPrice StabilityPrice Stability


A shortage (on a Supply and A shortage (on a Supply and Demand Graph) will cause the Demand Graph) will cause the price to _______.price to _______.


RiseRise


A surplus on the PPF curve will A surplus on the PPF curve will cause the price to ______.cause the price to ______.


FallFall

Economics ReviewEconomics Review Would any of following generalizations be Would any of following generalizations be

true based on the information learned in true based on the information learned in the class?the class?

Countries with low literacy rates have a high Countries with low literacy rates have a high per capita G.D.P.per capita G.D.P.

People tend to live longer lives in developing People tend to live longer lives in developing nations.nations.

Countries with a high per capita G.D.P. tend to Countries with a high per capita G.D.P. tend to have high literacy rates.have high literacy rates.

In nations with a high per capita G.D.P., people In nations with a high per capita G.D.P., people usually have a short life expectancy.usually have a short life expectancy.


Countries with a high per Countries with a high per capita G.D.P. tend to have capita G.D.P. tend to have high literacy rates.high literacy rates.

Economics ReviewEconomics Review The main reason that some US The main reason that some US

businesses moved their factories to businesses moved their factories to other countries in the 1900s was other countries in the 1900s was ____________.____________.


cheaper wagescheaper wages


What is NAFTA? What is its What is NAFTA? What is its purpose?purpose?


North American Free Trade North American Free Trade AgreementAgreement

Removal of trade restrictions Removal of trade restrictions among United States, among United States, Canada, and Mexico and Canada, and Mexico and stimulation of economic stimulation of economic growthgrowth


Which are the ways to increase Which are the ways to increase productivity?productivity?


More capital goods per More capital goods per workerworker

New and better technologyNew and better technologyBetter allocation of Better allocation of

resourcesresources


What are the fundamental What are the fundamental economic questions?economic questions?


Who consumes goods and Who consumes goods and services?services?

How should goods and How should goods and services be services be

produced?produced?What goods and services What goods and services

should be produced?should be produced?

Economics ReviewEconomics Review What are the characteristics of What are the characteristics of

Capitalism?Capitalism?


Economic FreedomEconomic FreedomPrivate PropertyPrivate PropertyVoluntary ExchangeVoluntary Exchange


If supply exceeds demand there If supply exceeds demand there is (a/an) __________. is (a/an) __________.


SurplusSurplus


If demand exceeds supply there If demand exceeds supply there is (a/an) _________.is (a/an) _________.


ShortageShortage


When the business and owners When the business and owners are legally separated so that the are legally separated so that the owners aren’t responsible for owners aren’t responsible for the debts of the business, you the debts of the business, you have _____________.have _____________.


limited liabilitylimited liability


Issued by state and local Issued by state and local governments, they pay a lower governments, they pay a lower rate of interest but are tax-free.rate of interest but are tax-free.

Treasury Notes Treasury Notes Penny Stock Penny Stock Municipal Bonds aka “Munis”Municipal Bonds aka “Munis” Preferred StockPreferred Stock Common StockCommon Stock


Municipal Bonds aka Municipal Bonds aka “Munis”“Munis”


What is the amount of What is the amount of interest charged to member interest charged to member banks when they get a banks when they get a temporary loans by the temporary loans by the Federal Reserve?Federal Reserve?


Discount RateDiscount Rate


What is the dollar value of all What is the dollar value of all final goods and services final goods and services produced within a country’s produced within a country’s borders in a year?borders in a year?


Gross Domestic Product - Gross Domestic Product - GDPGDP


What insurance covers your What insurance covers your vehicle for anything other than vehicle for anything other than collision, such as theft, broken collision, such as theft, broken glass, water, and etc.?glass, water, and etc.?


ComprehensiveComprehensive


If Country A can produce If Country A can produce tractors at a lower cost than tractors at a lower cost than Country B. Country A has a (n) Country B. Country A has a (n) _____ Advantage._____ Advantage.


Absolute AdvantageAbsolute Advantage

Economics ReviewEconomics Review What was Bill Gates’ goal for his What was Bill Gates’ goal for his

company?company?

form a Utopia form a Utopia have a computer on every desk and in have a computer on every desk and in

every home, all running his softwareevery home, all running his software create a new system based on no create a new system based on no

taxation without political representationtaxation without political representation allow customers to have it there way allow customers to have it there way

while encouraging competitionwhile encouraging competition


have a computer on every have a computer on every desk and in every home, desk and in every home, all running his softwareall running his software

Economics ReviewEconomics Review Which of the following are true Which of the following are true

concerning a corporation?concerning a corporation?

stockholders own the companystockholders own the company the owners receive dividendsthe owners receive dividends the owners are liablethe owners are liable policies are set by a board of policies are set by a board of

directorsdirectors


stockholders own the stockholders own the companycompany

the owners receive the owners receive dividendsdividends

policies are set by a policies are set by a board of directorsboard of directors

Economics ReviewEconomics Review Which business organization can Which business organization can

the company be owned by outside the company be owned by outside investors to increase capital investors to increase capital availability?availability?


CorporationCorporation

Given the above table and graph, what is the equilibrium price and quantity?



$3.00 and 7,000


What would happen to Equilibrium What would happen to Equilibrium Price and Quantity if the demand Price and Quantity if the demand curve remains unchanged and curve remains unchanged and the supply curve shifts to the the supply curve shifts to the right?right?


quantity would increase quantity would increase and the price would and the price would decreasedecrease

Economics ReviewEconomics Review What would happen to Equilibrium What would happen to Equilibrium

Price and Quantity if the supply Price and Quantity if the supply curve remains curve remains unchanged and the unchanged and the demand demand curve shifts to the left? curve shifts to the left?


quantity would decrease quantity would decrease and the price would and the price would decreasedecrease

Economics ReviewEconomics Review What would happen to the supply of What would happen to the supply of

orangesoranges if there was a freeze in if there was a freeze in Northern Florida that destroyed 40% Northern Florida that destroyed 40% of the orange crop?of the orange crop?


it would decreaseit would decrease


Price and Quantity if the demand Price and Quantity if the demand curve shifts to the left and the supply curve shifts to the left and the supply curve shifts to the left?curve shifts to the left?


price would remain price would remain unchanged or decrease unchanged or decrease and quantity would and quantity would decreasedecrease


Price and Quantity if the demand Price and Quantity if the demand curve shifts to the right and the curve shifts to the right and the supply curve shifts to the right?supply curve shifts to the right?


price would remain price would remain unchanged or go up and unchanged or go up and quantity would increasequantity would increase


What does the FDIC do?What does the FDIC do?


Insures deposits in bank Insures deposits in bank accounts accounts


Which business organizations Which business organizations are decisions shared by the are decisions shared by the few owners?few owners?


PartnershipPartnership


What is fiscal policy?What is fiscal policy?


Using government taxation & Using government taxation & spending to make spending to make adjustments to the economyadjustments to the economy


What is Scarcity? What is Scarcity?


It means that there are It means that there are limited resources to satisfy limited resources to satisfy unlimited wantsunlimited wants


What characteristics would What characteristics would describe a partnership?describe a partnership?


two or more people own the two or more people own the companycompany

Add more!!!!Add more!!!!

Economics ReviewEconomics Review What is a deduction on personal What is a deduction on personal

income taxes if a person itemizes?income taxes if a person itemizes?


Mortgage Interest on 1-2 Mortgage Interest on 1-2 homeshomes

Charitable contributionsCharitable contributions State property or sale taxesState property or sale taxes

Economics ReviewEconomics Review What is the relationship between What is the relationship between

American exports and American American exports and American economic growth?economic growth?

Exports account for one-third of Exports account for one-third of

America’s economic growth.America’s economic growth. The American economy depends totally The American economy depends totally

on exports.on exports. Over half of the economy’s growth can Over half of the economy’s growth can

be attributed to exports.be attributed to exports.


Exports account for one-Exports account for one-third of America’s third of America’s economic growth.economic growth.


What is the role of government What is the role of government in a pure market economy - in a pure market economy -


government does not government does not interfere in the economyinterfere in the economy

What role do households play in the production of businesses’ products and government’s goods and services? Households –


provide the resources that make production possible.

Give examples


What are the characteristics of a What are the characteristics of a Command Economy?Command Economy?

Government controls the Government controls the economy. economy.



What are the characteristics of a What are the characteristics of a Traditional Economy?Traditional Economy?


Small and ritualisticSmall and ritualistic


What are the characteristics of a What are the characteristics of a Free Enterprise Economy?Free Enterprise Economy?


Economy balancing government Economy balancing government intervention and freedom like intervention and freedom like the U.S.the U.S.

Economics ReviewEconomics Review Which of the following questions might an Which of the following questions might an

economist ask in order to develop a economist ask in order to develop a hypothesis about consumer spending in hypothesis about consumer spending in the United States after World War I?the United States after World War I?

What products did households buy in the What products did households buy in the 1920s?1920s?

How many labor strikes occurred in the How many labor strikes occurred in the 1920s?1920s? What was the average hourly wage in the What was the average hourly wage in the

1920s?1920s? How long did it take to produce a car in the How long did it take to produce a car in the

1920s?1920s?


What products did What products did households buy in the households buy in the 1920s?1920s?


Which economic activity could Which economic activity could be carried out just as well in be carried out just as well in suburban, rural, or urban suburban, rural, or urban environments?environments?


A service activity such as A service activity such as teaching.teaching.


Why will deficit spending end a Why will deficit spending end a depression?depression?


It increases purchasing It increases purchasing power and stimulates power and stimulates economic growth.economic growth.


Be able to read a chart and Be able to read a chart and graph.graph.


What is the process in which What is the process in which union and company union and company representatives meet to representatives meet to negotiate a new labor contract is negotiate a new labor contract is known as –known as –


Collective BargainingCollective Bargaining


Which are the problems in Which are the problems in developing nations? developing nations?


Unstable governmentUnstable governmentIlliteracyIlliteracyCapital FlightCapital FlightLimited natural resourcesLimited natural resourcesRapid Population GrowthRapid Population GrowthForeign DebtForeign DebtPoor health carePoor health care

Documents

Economics Review Fall 2013. Economics Review Who wrote “The Wealth of Nations” ? Who wrote “The Wealth of Nations” ?