Financial Planning
1.Describe two examples of important things that financial planning skills can help you do, and explain why these things are important to you personally. Well, financial planning skills can help you do many important things. For starters it can give you a better foundation for the future. In other words it helps your stability, you don’t have to worry about where you rent money’s going to come from cause you are financially stable from that foundation you built. Lastly, it gives you freedom and the sense of security. It’s never good when you have to live paycheck to paycheck.
2.List two examples of goods you have purchased in the past or may purchase in the future. Two goods I’ve bought in the past were a necklace and a phone.
3.List two examples of services you have purchased in the past or may purchase in the future. Two examples of services I’ve purchased on the past would be plumbing and babysitting.
4.One of the functions of money is as a store of value. How does inflation affect money’s ability to store value? Inflation affects money’s value by dropping the price to a low rate. This also affects store value in many ways. Most importantly it causes the price of certain products to go up at a certain rate. 5. Imagine that you are considering moving to a new country and looking for a job there, but you first want to make sure the country has a strong economy.
Describe at least three economic factors that you would want to research as evidence of the economy’s strength or weakness, and explain how each factor would affect your decision to move there. If I’m considering moving to a new country and looking for a job there, the first economic factor that I would research on would be unemployment rate. That would give an idea of the competition for jobs, if the unemployment rate been low for years and years you would already know the competition there is really hard.
The second economic factor would be the Gross Domestic Product, also known as GPD. This is the sum of all non-governmental spending. Therefore if the GPD has been growing or been steady over a good period of time the economy is stable. A country with a weak economy isn’t the best place to move to.
Lastly Inflation, the worth of the money which also effects store value.
6.Explain which economic system (market, planned, mixed, or traditional) you think is best for consumers. Describe at least one reason why you think this system is best for consumers. Mixed economies are likely to be the best choice for consumers. Because there is no dominance of a particular ideology (capitalism, socialism, etc), this type of system allows for a wider variety of applying differing methods to a host of problems. In other words, it allows for greater openness and less restriction when considering which ideas are ideal for the situation.
7.In capitalism, most businesses have a profit motive. Describe at least one reason that businesses with a profit motive may be helpful for society and at least one reason that they may be harmful for society. Then, explain whether you think profit motive is a good thing or a bad thing for society.
Capitalism allows people to choose what they want to do (job), it gives people the right to spend their money where they want. Profit motives are helpful for society since a profitable company increases the value of the community, increases the available job and the spending power of the employees. Profit motive is a good thing, because a society without a profit motive, there is little to no reason for anyone to work harder.
8.Choose a well-known company that you know of, and describe its direct and indirect competitors. Describe at least three direct competitors and three indirect competitors. McDonald’s, some of McDonald’s direct competitors would be Wendy’s, burger king and Sonic.
Indirect competitors would include, Pizza Hut, Papa John’s, and Little Caesar’s. It’s arguable that Pizza Hut and McDonalds are only indirect competitors because while, they are both essentially fast food places, people looking for one usually are not looking for the other. (When you want a burger you’re usually not thinking of pizza. Now, if McDonald’s starts selling pizza then that argument changes.)
9. Imagine that you are buying a new computer and comparing different brands and prices. Describe at least two non-price competition factors you might consider when making your decision.
Quality and functionality.
10.Describe a real or made up but realistic example of a product that went through a time of scarcity, when demand was greater than the supply. What is the product, and why do you think it became scarce? What happened to the price of the product when it was scarce? One example was tires for cars. Rubber comes from trees that grow in the tropics and some of that was in war zones. Also there was high demand for military use so civilians could not get tires. Prices were controlled by the government; otherwise they would have gone very high.
Automobiles for civilian consumption were not produced during WW2, so any car in good condition made before the war was in demand. The factories had been shifted over to production of military trucks (and tanks and jeeps). 11.Describe a product, and then give an example of a time when the demand for this product might be high and the demand for this product might be low. Natural Gas is a product that is used to power a few vehicles and heat many houses. In the colder months there is a great demand but in the summer months demand drops off.
12.Describe an example of a product that has highly elastic demand. Describe at least two factors that make this product’s demand so elastic. Fast food is a classic example of elastic demand. This is so because there are many competitors in the fat food industry. Price plays a very important role when it comes to making a decision about choosing a fast food place ….the place where the price would be lesser is where the customer will go. Hence demand is highly elastic as price change is having an effect on demand.
