Markets and You Module Note Guide
1. Government: represents any lawmaking body (local, state, or national) that
collects taxes and provides services to individuals and businesses.
2. Households: include individuals like you and those living in the same home.
Circular-flow diagrams interchangeably use the terms "households" and
"individuals."
3. Business Firms: include any company type that earns income from the sale of
goods and services.
4. The rest of the world: represents interaction with all those three groups in
foreign countries. It refers to the international trade of import and export
products.
5. product market: is the buying and selling of finished goods and services, like
your morning latte.
6. factor market: is the exchange of the factors of production including
components of land, labor, and capital, such as a coffee company purchasing
equipment to process coffee beans.
7. financial market: refers to the stock market and banking services, including the
loans all the other economic players use to meet their goals.
8. The ___ ______________ market is the one where consumers buy goods
and services.: product
9. The __________ market is the one where businesses buy the raw
materials, labor service, and machinery needed to make goods and
services possible.-
: factor
10. Payment a business receives from customers for its products is:
_revenue_______________.
11. Consumer goods=: = resource acquired for direct use
12. Capital goods=: resource obtained by a business from another to produce a
consumer good or service (I.e., tools, machinery, intermediate goods)
13. Which economic player(s) are the primary suppliers in the factor market?:
You are. Well, individuals and households in general are the suppliers of labor,
an essential factor of production. Businesses can be suppliers in the factor
market as well, those that produce capital goods such as machinery.
14. True or False: All economic players demand products in the financial
market.: True! Individuals, businesses, governments, and all of those in foreign
countries purchase financial assets and obtain loans from U.S.-based banks
and other financial institutions.
15. Land: All the natural physical resources necessary to your product or service
16. Labor: The human work that goes into the business—physical and mental skills
, Markets and You Module Note Guide
17. Entrepreneurship: Intelligence, imagination, and ability to take the risks that
are needed to start up and maintain a business, a component of labor
18. Capital: The tools humans create to make the business more efficient—
financial and physical
Physical capital—buildings, land to build on, machines like pizza ovens, vehicles,
credit card machines
Financial capital—the funds to pay for all other resources
19. Materials and work that contribute to a product or service are called:
__factors of production_______________.
20. All resources are ________________.: scarce_
21. Giving up an activity or item for the activity or item you chose is called a
_______________.: opportunity cost
22. Successful businesses must consider all ___________.: options_______
23. Costs and benefits that encourage you to make a choice or take an
action are _______________.: incentives__
24. Identify three ways people can safeguard their ideas and inventions
through the U.S. government.: - Patents protect inventions, copyrights cover
artistic productions like books and songs, and trademarks are brand names
associated with goods or services.
25. Explain how the three safeguards you identified above are incentives to
produce for people and businesses.: - These protections help ensure that an
inventor can profit from their work. Copyrights, patents, and related safeguards
are incentives to create and produce new things. A free market economy thrives
on innovation. Providing options for creators of products and content to protect
their works encourages experimentation and novelty. Invention and creativity
help start and grow businesses, expand the economy, and advance society
overall.
26. A ______________ economy is one where people earn income providing
on-demand goods and services.: gig___
27. Sole proprietorship: Single owner of a business
28. Partnership: Type of business organization where two or more people share
ownership and all liability
29. Limited liability company: Form of business organization that reduces
personal finical and legal responsibility for the owners
30. Corporation: Form of business organization that distributes ownership and
profits among shareholders.
31. Businesses organize to ________________ risk and ________________
profits.: minimize_and maximize _
, Markets and You Module Note Guide
32. The portion of total sales in a market that goes to one business is the __
_______________.: market share
33. A firm's market power relies on their ability to _________________ their
market share.: increase
34. Firms that act in _________________ try to control the market by setting
prices in secret.: collusion
35. Purely competitive: Price-takers, easy entry and exit into and from this market
type, products are the same (homogenous), many sellers, shared information
36. Oligopoly: An oligopoly is a group of companies producing a similar good that
works together to set the price and to determine how much to supply. Whereas
a single producer characterizes a monopoly, in an oligopoly a group of
producers joins forces and works together to dominate the market for a good or
service. They build an alliance to gain an edge on remaining competition. This
alliance is a "price leader," determining the price to charge for the product. Entry
into an oligopolistic market is complicated because the producers must accept
the new company into their "club" or face a greater risk of failure. An example
of oligopoly is the international market for oil, tightly controlled by OPEC
(Organization of the Petroleum Exporting Countries). 37. Monopolistic
Competition: In this market, there are relatively few barriers to entry. Rather
than work together to set price, producers compete against one another to gain
consumers. Price is set by competition rather than by a single store or group of
stores working together. It's every business owner for themselves. Companies
are highly competitive in their attempts to gain customer loyalty by offering the
best customer service and product quality possible. Advertising is an important
way these firms compete. Most product markets in the United States are
monopolistically competitive.
38. Monopoly: A monopoly exists when a single company has control over the
market for a particular good or service. It has high barriers to market entry. That
means it is difficult to become a producer and more likely only one company, or
firm, will be the sole producer of a good or service. An example of a barrier to
entry is a patent, which gives the patent owner the exclusive right to producing
and profiting from the product. Because a single firm controls the market, the firm
is a "price setter." The "price setter" charges whatever price they want. In the free
market economy of the United States, competition is valued as a way to protect
consumer choice and freedom. Therefore, while there are incentives to innovate
like patents, there are also laws aimed at preventing monopolies. Amazon has
amassed significant market share in the online retail sales market, and some
allege it has or soon will have monopoly power.
1. Government: represents any lawmaking body (local, state, or national) that
collects taxes and provides services to individuals and businesses.
2. Households: include individuals like you and those living in the same home.
Circular-flow diagrams interchangeably use the terms "households" and
"individuals."
3. Business Firms: include any company type that earns income from the sale of
goods and services.
4. The rest of the world: represents interaction with all those three groups in
foreign countries. It refers to the international trade of import and export
products.
5. product market: is the buying and selling of finished goods and services, like
your morning latte.
6. factor market: is the exchange of the factors of production including
components of land, labor, and capital, such as a coffee company purchasing
equipment to process coffee beans.
7. financial market: refers to the stock market and banking services, including the
loans all the other economic players use to meet their goals.
8. The ___ ______________ market is the one where consumers buy goods
and services.: product
9. The __________ market is the one where businesses buy the raw
materials, labor service, and machinery needed to make goods and
services possible.-
: factor
10. Payment a business receives from customers for its products is:
_revenue_______________.
11. Consumer goods=: = resource acquired for direct use
12. Capital goods=: resource obtained by a business from another to produce a
consumer good or service (I.e., tools, machinery, intermediate goods)
13. Which economic player(s) are the primary suppliers in the factor market?:
You are. Well, individuals and households in general are the suppliers of labor,
an essential factor of production. Businesses can be suppliers in the factor
market as well, those that produce capital goods such as machinery.
14. True or False: All economic players demand products in the financial
market.: True! Individuals, businesses, governments, and all of those in foreign
countries purchase financial assets and obtain loans from U.S.-based banks
and other financial institutions.
15. Land: All the natural physical resources necessary to your product or service
16. Labor: The human work that goes into the business—physical and mental skills
, Markets and You Module Note Guide
17. Entrepreneurship: Intelligence, imagination, and ability to take the risks that
are needed to start up and maintain a business, a component of labor
18. Capital: The tools humans create to make the business more efficient—
financial and physical
Physical capital—buildings, land to build on, machines like pizza ovens, vehicles,
credit card machines
Financial capital—the funds to pay for all other resources
19. Materials and work that contribute to a product or service are called:
__factors of production_______________.
20. All resources are ________________.: scarce_
21. Giving up an activity or item for the activity or item you chose is called a
_______________.: opportunity cost
22. Successful businesses must consider all ___________.: options_______
23. Costs and benefits that encourage you to make a choice or take an
action are _______________.: incentives__
24. Identify three ways people can safeguard their ideas and inventions
through the U.S. government.: - Patents protect inventions, copyrights cover
artistic productions like books and songs, and trademarks are brand names
associated with goods or services.
25. Explain how the three safeguards you identified above are incentives to
produce for people and businesses.: - These protections help ensure that an
inventor can profit from their work. Copyrights, patents, and related safeguards
are incentives to create and produce new things. A free market economy thrives
on innovation. Providing options for creators of products and content to protect
their works encourages experimentation and novelty. Invention and creativity
help start and grow businesses, expand the economy, and advance society
overall.
26. A ______________ economy is one where people earn income providing
on-demand goods and services.: gig___
27. Sole proprietorship: Single owner of a business
28. Partnership: Type of business organization where two or more people share
ownership and all liability
29. Limited liability company: Form of business organization that reduces
personal finical and legal responsibility for the owners
30. Corporation: Form of business organization that distributes ownership and
profits among shareholders.
31. Businesses organize to ________________ risk and ________________
profits.: minimize_and maximize _
, Markets and You Module Note Guide
32. The portion of total sales in a market that goes to one business is the __
_______________.: market share
33. A firm's market power relies on their ability to _________________ their
market share.: increase
34. Firms that act in _________________ try to control the market by setting
prices in secret.: collusion
35. Purely competitive: Price-takers, easy entry and exit into and from this market
type, products are the same (homogenous), many sellers, shared information
36. Oligopoly: An oligopoly is a group of companies producing a similar good that
works together to set the price and to determine how much to supply. Whereas
a single producer characterizes a monopoly, in an oligopoly a group of
producers joins forces and works together to dominate the market for a good or
service. They build an alliance to gain an edge on remaining competition. This
alliance is a "price leader," determining the price to charge for the product. Entry
into an oligopolistic market is complicated because the producers must accept
the new company into their "club" or face a greater risk of failure. An example
of oligopoly is the international market for oil, tightly controlled by OPEC
(Organization of the Petroleum Exporting Countries). 37. Monopolistic
Competition: In this market, there are relatively few barriers to entry. Rather
than work together to set price, producers compete against one another to gain
consumers. Price is set by competition rather than by a single store or group of
stores working together. It's every business owner for themselves. Companies
are highly competitive in their attempts to gain customer loyalty by offering the
best customer service and product quality possible. Advertising is an important
way these firms compete. Most product markets in the United States are
monopolistically competitive.
38. Monopoly: A monopoly exists when a single company has control over the
market for a particular good or service. It has high barriers to market entry. That
means it is difficult to become a producer and more likely only one company, or
firm, will be the sole producer of a good or service. An example of a barrier to
entry is a patent, which gives the patent owner the exclusive right to producing
and profiting from the product. Because a single firm controls the market, the firm
is a "price setter." The "price setter" charges whatever price they want. In the free
market economy of the United States, competition is valued as a way to protect
consumer choice and freedom. Therefore, while there are incentives to innovate
like patents, there are also laws aimed at preventing monopolies. Amazon has
amassed significant market share in the online retail sales market, and some
allege it has or soon will have monopoly power.
