Notes, summaries, assignments, exams, and exercises for Economics for Secondary education

It affects the behavior of consumers in a broad sense such as, for example, prompting them to make decisions that they would not have otherwise adopted.  

What is Economic Activity?

Economic activity encompasses all processes used to obtain goods and services that people need. This includes essentials such as food, clothing, housing, or medical attention.

Phases of Economic Activity

Economic activity is typically divided into three main phases:

• Production

  This phase involves the creation of goods and services.

• Consumption

  This is the process where individuals and households buy and use goods and services to satisfy their economic wants and needs.

• Distribution

  This phase refers to the movement of goods and services from their places of production to the consumer.

Evolution of Payment Methods

Throughout history, various methods have been used for payment:

• Barter
• Natural coins (e.g., shells, salt)
• Metal coins
• Paper

Economies and Diseconomies of Scale

Economies of scale: Reduction in the average unit costs as the business increases in size. When a business increases the scale of operations, it becomes more efficient.

Diseconomies of scale: Increase in average unit costs as the business increases in size. This occurs when the business experiences inefficiencies as it becomes larger.

Internal Economies of Scale

Efficiencies the business makes itself:

• Technical: Bigger units of production reduce costs since the increase in variable costs are spread over a set of fixed costs.

• Managerial: Managers specialize in one job and not in many.

• Financial: Bigger businesses are less risky than smaller ones since big businesses are considered safe by financial institutions,

  The rise of finance capitalism affected an organisation of work, the development of consumerism, economic inability and the expansion of international trade.

THE ORGANISATION OF WORK

  The assembly line developed: each worker specialised in a task, such as placing a nut. Henry Ford was the first to use the assembly line in his car manufacturing company.

THE BIRTH OF THE CONSUMER SOCIETY

  The consumer society led to a new way of thinking; people began to value material wellbeing highly.

  *The upper class was the only social group that could afford luxury items.

  *The lower class had lower wages and couldn't afford luxury items.

Financial Intermediation

1. In direct financing, the lender… Trades money for the financial claim of the borrower
2. Which of the following is an example of indirect financing? … An SSU purchasing a financial claim from a commercial bank
3. Denomination intermediation is best exemplified by… issuing five $3,000 CDs and making one $15,000 loan
4. Maturity intermediation is best associated with… receiving funds in six-month CDs and offering thirty-year mortgage loans
5. All of the following are benefits provided by financial intermediaries, except: elimination of default risk

The Federal Reserve

6. Which of the following is not one of the original goals of the Federal Reserve? Maintaining the value of the U.S. dollar relative to gold
7. Which of the following are

Fundamental Business Concepts

The primary purpose of a business: A business seeks to make a profit by selling goods or services to others.

For-Profit vs. Non-Profit Organizations

A for-profit business is an organization formed to make money, or profits, by selling goods or services.

• A non-profit organization's purpose is not to distribute its surplus funds, or profits, to owners but rather to further its goals.

Key Business Terminology

Revenue: The total amount of money that the selling of goods or services produces for a business during a defined period of time.

Goods: Tangible products (items you can touch).

Services: Intangible products (items you cannot touch).

Profit: The amount of money a business makes after paying for its salaries and all other...

Taxation and Deadweight Loss

A given tax will cause a smaller deadweight loss if demand and supply are: Inelastic (the loss is bigger if they are elastic).

Deadweight loss occurs in a taxed market because: The tax causes the market to trade less than the optimal units, so all the surplus of the units not traded is lost.

If a tax is imposed on a good and the incidence falls more heavily on the sellers than the buyers: This is because demand is more elastic than supply for that good.

Production and Diminishing Returns

Diminishing Marginal Product of Labor (MPL) states that: Every additional worker contributes a smaller increase in production than the previously hired worker.

At low levels of production, ATC decreases because: Fixed cost is spread....

Accounting Fundamentals

Accounting is often called the language of business. It helps people make decisions.

Types of Accounting

Tax Accounting

Helps determine how much is owed to the government for taxes. Rules are set by the government. Users include businesses and the government.

Managerial Accounting

Helps people inside the business make decisions. There are no strict external rules; it's customized depending on the type of company. Users are typically internal managers.

Financial Accounting

Helps people outside the business make decisions. It produces multi-purpose results and follows established rules (like GAAP or IFRS). Users include investors, creditors, and others.

Functions and Responsibilities of an Accounting Department

• Payroll: Calculate

Understanding Pension Plans

A private pension plan is a savings plan with flexible contributions designed for future retirement, disability, or death, or to complement a public pension. A company pension plan is a retirement plan where an employer makes contributions into a fund for a worker's future benefit.

Benefits of a good pension plan often include favorable taxation, versatility, and flexibility in payments.

• Private Pension Calculation Example: % of previous salary - public pension
• Public Pension Calculation Example: Regulating base x % (depending on years)

Money: Functions and Types

Money is generally accepted as a medium of exchange for payments and collections.

Functions of Money

1. Medium of exchange
2. Store of value
3. Unit of account

Types of Money

1. Legal

It was a decade of contradictions. It was not only a period of hedonism but there was another important aspect: transformation of American industry.

Transformation of American Industry

Transformation of American industry

• Consumption: major driver of American industry.
• Readjustment: military and army technological advances adapted for civilian uses.
• Mass consumption: helped to originate installment plans.

The Great Depression

The Great Depression

The Industrial Utopia in the 1920s

Charles Sheeler and Precisionism

Charles Sheeler was a painter of Precisionism, a movement where artists celebrated industrial capitalism in their paintings. Those examples represent the new Ford factory.

Economic Factors Behind the Crash

Economic factors behind the crash

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