Economics Benchmark Review Basic Concepts and Terms.
-
Upload
norman-hensley -
Category
Documents
-
view
218 -
download
0
Transcript of Economics Benchmark Review Basic Concepts and Terms.
Identify entrepreneur
• Creates a new business or product or improves an existing one
• Willing to take financial risk
• Looking for monetary gain
Define scarcity
• Basic problem of economics that results from the combination of unlimited wants and limited resources. It forces people to make choices.
Identify the three factors that determine value.
• desirability
• scarcity
• utility
Identify three ways businesses try to increase efficiency.
• Division of labor
• Specialization
• Allocation of resources
Investing in education, training, morals, values, health and skills are examples of?
• Human capital
Market
• In this model economic system individuals make decisions about what, how, and for whom to produce.
Voluntary Exchange
• The unconditional and mutually beneficial transfer of products between producers and consumers
Self-interest
• Adam Smith’s theory: The impulse that encourages people to satisfy their wants and needs which consequently benefits society.
Identify the five features of the U.S. free enterprise system.
1. Private property &
contracts
2. Individual choice
3. competition
4. Self-interest & voluntary exchange
5. Limited government
The idea that money is worth more now than it will be in the future.
• Present value
1990 1990
2010 / less $ 2010 / more $
Identify eight different types of investments
• Savings account• Money market• Certificate of deposit• Bond• Blue-chip stock• Growth stock• Real estate• Commodities / Precious
metals, oil, crops, etc.
Identify the four things to consider when making an investment.
• rate of return
• risk/ diversification
• liquidity
• tax benefit.