- •1.What kind of science is economics?
- •2. What does economics explain?
- •4. What economic issues do we meet with every day of our lives?
- •1.What is economics?
- •11. What do economists use to explain or describe the “world that is”?
- •17. Why does positive economics avoid value judgements?
- •18. Why do economists use positive economics?
- •22. Why can some economic issues never be decided by using facts?
- •1/ What are economic resources?
- •21. What factors of production are active (flexible) and passive (fixed)? Why?
- •1.What are the three basic economic questions that every society must answer?
- •2.What makes each society look for the answers to the basic economic questions?
- •3/ How does each society make its decisions to solve the problem of scarcity?
- •6/What does the Who question mean?
- •7/What is an economic system?
- •9/What is a traditional economy?
- •11/ Why are there few social changes within a traditional economy?
- •12/What is a command economy?
- •13/ Who makes decisions on the fundamental economic questions in a society with a command economy?
- •15/Why do the individuals have very little say as to how the basic economic questions are answered?
- •16/What is a market economy?
- •19What is a free enterprise system based on?
- •20/Who owns the means of production in a society with a market economy?
- •1. Why is the theory of supply and demand considered one of the most fundamental concepts of economics?
- •2. What is demand?
- •3. What factors alter consumer demand?
- •4. What goods are considered to be related?
- •8. What does the law of diminishing marginal utility explain?
- •9. What does the law of demand state?
- •7.What is a supply schedule?
- •8.What is a supply curve?
- •9.What does supply curve enable producers to anticipate?
- •10.What does each point along the curve represent?
- •21.How does the cost of production affect the behavior of producers?
- •24.How do future expectations affect the quantity supplied?
- •25.Why are profit opportunities considered as factors that influence the quantity supplied?
- •29.Why is elasticity important in understanding supply and demand theories?
- •31.When supply is elastic?
- •In a Market Economy
- •1.What is a price?
- •3.What is a price system?
- •12. What does the characteristic of perfect competition “no barriers to enter or exit the market” mean? .
- •7. What does legal tender mean?
- •25. What does the purchasing power of money mean?
- •8.What drawbacks do they have?
- •9.What is difference between credit and debit cards?
- •11.What is a charge account?
- •14.What is a consumer credit?
- •15.What does consumer credit provide?
- •17.What is a consumer loan?
- •21. Why is savings considered one of the ways of good money management?
- •23. What factors should be considered before staring any kind of savings program? 24. What does safety mean?
- •25. What is liquidity? •
- •29. What does the yield depend on?
- •30. What accounts are offered by depository institutions?
- •32. Why do some people put their money in savings accounts? •
- •35. Why do financial institutions charge the highest interest rates on cDs?
- •38. What steps should be taken to reach financial goals?
- •6. What is a sole proprietor responsible for?
- •15. What is a corporation?
- •16. What is the essential feature of a corporation?
- •17. Who owns a corporation?
- •23. Why does a corporation have a continuous existence?
- •27. What does double taxation refer to?
- •28. What are dividends?
- •29. What is the role of the board of directors?
15. What is a corporation?
a corporation is a business that is authorized by law as a separate legal entity with its own powers, responsibilities, and obligations..
16. What is the essential feature of a corporation?
The essential feature of a corporation is its legal independence from its owners
17. Who owns a corporation?
Ownership of a corporation is represented by shares of stock also called stock or shares. The corporate owners are known as shareholders or stockholders
.18. What are the major advantages of a corporation? Limited liability is one of the major advantages of a corporation. Being a separate legal entity, the corporation actually owns and operates the business for the benefit of the shareholders, but under their total control.
Shares of ownership are transferable.. Corporation has unlimited life. It is much easier for a corporation to increase capital to manage and expand its operations.
. 19. What is limited liability?
Limited liability: an advantage of a corporation allowing a stockholder no legal responsibility for the debts beyond the sum he or she has invested in the corporation
.20. What is the advantage of limited liability?
21. What liability do the shareholders have? Shareholders are not liable for the debts of a company they own shares in. If a business fails shareholders can lose no more than he or she has paid for the shares of stock but their personal assets – car, home, and personal bank accounts – are safe from the creditors of the business
. 22. Who can become a shareholder? Shares of ownership are transferable. Stockholders can enter or leave a corporation at will simply by buying or selling shares of stock.
23. Why does a corporation have a continuous existence?
The corporation’s power of succession enables it to have a continuous existence. Unlike a sole proprietorship, the death of the corporate stockholders will not terminate the corporation, since their shares are passed on to their heirs. 24. Why is it much easier for a corporation to increase additional capital?
It is much easier for a corporation to increase capital to manage and expand its operations. To raise additional funds corporation attracts new stockholders by selling its new issues of shares to the public.
25. What are the major disadvantages of a corporation? A corporation is difficult and expensive to create and organize Corporation is subject to double taxation. The shareholders do not directly manage the corporation's daily operations.
26. What does the process of creating a corporation require? This process requires higher start-up capital and the services of a lawyer to obtain a government charter.
27. What does double taxation refer to?
As a legal entity it pays a corporateincometax. Then, if the corporation distributes some of its net income to the stockholders as dividends, they are taxed again on the stockholders’ individual income tax returns.
28. What are dividends?
Dividends: payments made from the earnings of a corporation to its stockholders.