1.01 Economic Systems and Supply and Demand

PBF Semester Review

1.01 Economic Systems and Supply and Demand

1. The role of the consumer includes 3 things:

______to buy

______they are willing to pay

2. The role of the producer includes 3 things:

What to ______

What ______to satisfy

What ______they want to receive

3. ______is the quantity of goods or services that businesses are willing and able provide.

4. ______is the quantity of goods or services that consumers are willing and able to pay.

5. ______is the point where supply and demand are equal.

6. Name three categories of economic resources:

______

7. Give 3 examples of natural resources:

______

8. What are 3 types of human resources:

______

9. Name 2 types of capital resources:

______

10. What is another name for economic resources? ______

11. What is the basic economic problem for all countries? ______
______

12. Name the 3 types of economic systems:

______

13. Who owns the resources in a command economy? ______

14. Who decides what is produced in a command economy? ______

15. Who controls the goods and services in a market economy? ______

16. Who controls the goods and services in a traditional economy? ______

17. Name 2 countries with command economies:

______

18. Name 2 countries with market economies:

______

19. Name 2 countries with traditional economies:

______

20. Traditional economies are countries that are typically developing or considered: ______

21. What 2 economies are combined to make a mixed economy?

______

22. Fill in the Chart:

Economic System Decisions made by:

Practice Questions (1.01 Economic Systems and Supply and Demand):

The United States and the United Kingdom have this kind of economic system
a. market
b. command
c. traditional
d. mixed
The definition of economic resources is:
a. the means through which goods and services are produced
b. natural, human, and capital
c. resources used to satisfy unlimited needs and wants
d. the process of choosing which needs and wants to satisfy
The role of the consumer
a. decides what to buy, when to buy it, and at what price they are willing to pay
b. decides what to buy, if to buy it, and to pay cash or credit
c. decides what to buy, where to buy it, and at what price they are willing to pay
d. decides what to buy, where to buy it, and determines when sales occur
Ethiopia, Uganda, and Afghanistan have this kind of economic system
a. market
b. command
c. traditional
d. mixed
The role of the producer
a. decides what to produce and what interest rate to charge
b. decides what to produce and what price to sell
c. decides what to produce and the government determines price
d. decides what to produce and consumers determine price

1.02 Understand Economic Activities and Conditions

23. Name the 4 components of the business cycle?

______

24. What is the component of the business cycle during the following conditions:

Businesses are making profits and unemployment is low. ______
Businesses are strategizing how to increase sales and services. ______
Businesses are trying to avoid going out of business: ______
Businesses are seeing an increase in sales and need to hire more employees: ______

25. Name the four things that are considered when calculating GDP:

______

26. This rate is reserved for the banks best customers: ______

27. This rate is what the Federal Reserve charges to financial institutions: ______

28. Match the following words with its definition:

The total dollar value of all final goods and services produced in one year. ______

Gross Domestic Product divided by the population. ______

Dollars spent by individuals and businesses on products and services. ______

The number of available workers. ______

The money raised by a corporation entitling shareholders to an ownership interest in the company. ______

A certificate of debt that is issued by the government or business in order to raise money. ______

The income received by an individual. ______

A charge to borrow money. ______

Projects that improve the infrastructure of a business or government. ______

29. Below are the 3 economic indicators. What is considered in each category?

Practice Questions (1.02 Understand Economic Activities and Conditions):

Two economic indicators for labor activities are
a. employment rate and productivity
b. unemployment rate and productivity
c. unemployment rate and GDP per capita
d. consumer spending rate and stock market
In which business cycle are retail stores likely to rehire employees?
a. prosperity
b. recession
c. depression
d. recovery
In which business cycle are businesses likely to entice buyers to make more purchases?
a. prosperity
b. recession
c. depression
d. recovery
When products and services are plentiful and prices are decreasing because consumers do not have money to make purchases, this is called
a. inflation
b. deflation
c. depression
d. recession
The prime rate is
a. the interest rate offered by the Federal Reserve to other banks
b. the interest rate offered to the BEST
banking customers
c. the interest rate paid for a Certificate of deposit
d. the corporate bond rate
GDP Per Capita is the value
a. of all economic production in the capital of the country
b. of the economy when you consider only people who work
c. of economic production per person
d. is calculated only for countries with a market style economy
Which item is considered an economic indicator for consumer spending?
a. stock market
b. interest rate
c. unemployment rate
d. wages

1.03 Understand the Role of Business in the Global Marketplace

30. What are the 3 factors that impact currency exchange rates:

______

31. Where banks buy and sell different currencies: ______

32. ______The value of currency in one country compared to the value of currency of another country.

33. What are the 4 factors that effect international business environments?

______

33. ______This international organization promotes economic cooperation and maintains an orderly system of world wide trade and exchange rates.

34. ______This international organization provides economic aid to developing countries to fund building communication systems, transportation networks, and energy plans.

35. ______This international organization settles trade disputes and enforces free-trade agreements among its members.

36. Match the following definitions to the vocabulary words:

______The making, buying, and selling of goods and services within a country.

______Business activities needed for creating, shipping, and selling goods
and services across national borders.

______A country can produce a good or service at an obvious lower cost than

other countries can produce that good or service.

______Goods or services brought in from a foreign country.

______The difference between the amount of money that comes into and goes

out of a country.

______Good or services shipped outside the country.

______The amount of money a country owes to other countries.

______The difference between a country’s total exports and total imports.

______A country makes a good or service at which it is relatively more

efficient at producing than other countries.

37. Identify which countries have an absolute or comparative advantage for making the following products:

Saudi ArabiaOilAbsoluteComparative

ColumbiaCoffeeAbsoluteComparative

JapanElectronicsAbsoluteComparative

United StatesAgricultureAbsoluteComparative

ChinaClothingAbsoluteComparative

Virgin IslandsSandAbsoluteComparative

38. Categorize each example based upon its business environment.

A. A country that is nestled in the mountains and has no seaports.