What 4 factors influence the kind of clothing choices people make?
Style, durability, cost of care, and service flow.
What is the normal relationship between how long an article of clothing will last and its price?
The cost of care, and durability may not be worth the extra money.
What are some advantages of owning a house?
Provides significant income benefits, builds equity; market value-mortgage amount owned, and houses may go up in value.
What are some of the advantages of renting an apartment?
Requires only security deposit and 1 or 2 months of rent up front, have to pay no maintenance costs or real estate taxes, can move without worrying about selling.
Why are deposits of up to $100,000 in banks and savings institutions often considered very safe?
If insured institution fails, each deposit is paid full amount of savings up to $100,000 for each legally separate account.
What are 5 ways of investing in retirement?
Pension plans, individual retirement account (IRA), Roth IRA, buying real estate (lands and buildings) and Keogh Plan.
What government agency regulates stock and bond markets?
The Securities and Exchange Commission.
What is the law of demand?
It explains how people react to changing prices in terms of the qualities demanded of a good service.
Whats the distinction between elastic and inelastic demand?
Goods with elastic demand are usually luxury items or have many substitutes, inelastic demand goods are necessities or have few or no substitutes.
What does the law of supply state?
That as the price of a good rises, the quantity supplied generally rises; as the price falls, the quantity supply falls.
What are the advantages and disadvantages of a sole proprietorship?
A proprietor may get satisfaction from being the bass and creatively making the business to whatever he or she may want it to be. Running a business may be very demanding
private-labeled products
lower-priced store-brand products carried by some supermarket chains and club warehouse chains
service flow
amount of use a person gets from an item over time and the value a person places on this use
closing costs
fees involved in arranging for a mortgage or in transferring ownership of property
points
fees paid to a lender and computed as percentage of a loan
liability insurance
insurance that pays for bodily injury and property damage
time deposits
savings plans that require savers to leave their funds on deposit for certain periods of time
maturity
period of time at the end of which time deposits will pay a stated rate of interest
capital loss
decrease in value of an asset from the time it was bought to the time it was sold
Treasury bills
certificates issued by the U.S. Treasury in exchange for a minimum amount of $1000 and maturing in a few days up to 26 weeks
Keogh Plan
retirement plan for self-employed people that allows them to save up to a maximum of 15% of income and deduct it from their taxable income, type of time deposit
Roth IRA
private retirement plan that taxes income before it is saved, but which does not tax interest on that income when funds are used upon retirement
real income effect
economic rule stating that individuals cannot keep buying the same quantity of a product if its price rises while their income stays the same.
demand curve
downward-sloping line that graphically shows the quantities demanded at each possible price
elasticity
economic concept dealing with consumers' responsiveness to an increase or decrease in the price of a product
supply curve
upward-sloping line that shows in graph form the quantities supplied at each possible price.
black market
underground" or illegal market in which goods are traded at prices above their legal maximum prices or in which illegal goods are sold