first quarter assessment review
DESCRIPTION
FIRST QUARTER ASSESSMENT REVIEW. Microeconomics. THE STUDY OF THE BEHAVIOR OF INDIVIDUAL PLAYERS—SUCH AS INDIVIDUALS, FAMILIES, AND BUSINESSES—IN AN ECONOMY. Macroeconomics. THE STUDY OF THE BEHAVIOR OF THE ECONOMY AS A WHOLE; CONCERNED WITH LARGE-SCALE ECONOMIC ACTIVITY. Consumer. - PowerPoint PPT PresentationTRANSCRIPT
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FIRST QUARTER ASSESSMENT REVIEW
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Microeconomics
THE STUDY OF THE BEHAVIOR OF INDIVIDUAL PLAYERS—SUCH AS
INDIVIDUALS, FAMILIES, AND BUSINESSES—IN AN ECONOMY
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Macroeconomics
THE STUDY OF THE BEHAVIOR OF THE ECONOMY AS A WHOLE;
CONCERNED WITH LARGE-SCALE ECONOMIC ACTIVITY
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Consumer
PERSON WHO BUYS GOODS OR SERVICES FOR PERSONAL USE
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Producer
PERSON WHO MAKES GOODS OR PROVIDES SERVICES
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Need
PERSON WHO MAKES GOODS OR PROVIDES SERVICES
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Want
PERSON WHO MAKES GOODS OR PROVIDES SERVICES
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Production Possibility Curve (Frontier)A GRAPH USD TO ISLLUSTRATE THE IMPACT
OF SCARCITY ON AN ECONOMY; FOUR ASSUMPTIONS ARE MADE IN PPC’S:
1. All resources are fixed.2. All resources are fully employed.3. Technology is fixed.4. You can only produce two goods.
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Underutilization
THE CONDITION IN WHICH ECONOMIC RESOURCES ARE NOT
BEING USED TO THEIR FULL POTENTIAL, RESULTING IN FEWER
GOODS AND SERVICES
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Efficiency
THE CONDITION IN WHICH ECONOMIC RESOURCES ARE USED
TO PRODUCE THE MAXIMUM AMOUNT OF GOODS AND SERVICES
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Opportunity Cost
THE VALUE OF SOMETHING THAT IS GIVEN UP BY CHOOSING ONE ALTERNATIVE OVER ANOTHER
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Trade-off
THE ALTERNATIVE SOMEONE GIVES UP WHEN MAKING AN ECONOMIC
CHOICE
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Cost-benefit AnalysisTHE PRACTICE OF EXAMINING THE COSTS AND EXPECTED BENEFITS OF A CHOICE AS AN AID TO DECISION
MAKING
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Real CapitalALL THE RESOURCES PEOPLE MAKE
AND USE TO PRODUCE AND DISTRIBUTE GOODS AND SERVICES
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ContractA FORMAL, LEGALLY BINDING
AGREEMENT
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Future
A contract to buy or sell a stock on a specified future date at a preset
price
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Option
A contract giving the investor the right, but not the obligation, to buy or sell
stock at a future date at a preset price
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National Association of Securities Dealers Automated Quotation System–
1. Most often referred to as2. Sometimes called over-the-counter
stocks3. The most volatile exchange b/c it
features may hi-tech, insurance, and medical stocks
NASDAQ
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DOW JONES INDUSTRIAL AVERAGE-AVERAGE OF 30 STOCKS IN THE MARKET
The DJIA is an index of “blue chip” U.S. stocks. It is called an “average” because it originally was computed by adding up stock prices and dividing by the number of stocks. The 30 companies that make up the DJIA are all major players in their industries; these stocks are widely held by individuals and institutional investors. These 30 stocks represent about 1/5 of the $8 trillion-plus market value of all U.S. stocks.
http://nyjobsource.com/djia.html
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Corporate/Junk Bonds
• Issued by companies
• Usually for business expansion
• Highest risk
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LESS DEVELOPED COUNTRIES (LDCs)-These countries have a lower GDP, less well developed
industry, and a lower standard of living
Ex. Many African, South American, and Eastern European countries
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Six Determinant used to determine the level of development
• DEVELOPED – TRANSITIONAL (DEVELOPING) – LDC 1. PER CAPITA GDP2. HEALTH3. EDUCATION4. ENERGY USE5. CONSUMPTION OF GOODS AND SERVICES6. LABOR FORCE
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GDP
•THE MARKET VALUE OF ALL FINAL GOODS AND SERVICES PRODUCED
WITHIN A NATION IN A GIVEN TIME
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PER CAPITA GDP
•REAL GDP DIVIDED BY POPULATION
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FOUR CATEGORIES FOR FACTORS OF PRODUCTION:
1.LAND2. LABOR
3.CAPITAL 4.ENTREPRENEURSHIP
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Who is Adam Smith? (What did he write? What did he believe?)
Wrote The Wealth of Nations; reasoned that people behave in ways that satisfy their economic self-interest therefore, there is an “invisible hand” that guides
the economy and the government should not interfere.
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Who determines stock prices?
Consumers looking to purchase the stock determine the stock price
(just like supply and demand with products)
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Why do some people make risky investments?
Typically, the riskier the investment, the larger the
opportunity for gain.
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PLEASE CHANGE THE QUESTION TO:How would an investor
maximize returns and limit risks?
The investor would want to diversify their portfolio