What are two side of the circular flow Model?
Households and businesses
Which side of the circular flow model was Lawn Boy on when he mowed lawns?
business
What was Lawn Boy producing?
Lawn mowing and additional lawn care and cleaning
What are the factors of production? (4 of them)
Land, labor, capital and entrepreneurship
What capital resource did Lawn Boy get as a present from Grandma for his birthday?
Lawn Mower
Why had the supply of lawn workers in Lawn Boy's neighborhood decreased?
Other kids were at camp and the boss of the previous lawn service ran away with someone's wife.
Why were the neighbors willing to hire Lawn Boy?
He was a kid and considered safe. His prices were cheap.
What are two characteristics of demand?
willingness and ability to pay
Why did Arnold lack the ability to pay Lawn Boy in cash?
He had Liquidity (cash flow problem-all of his cash was in stocks)
Arnold offered to trade his stockbroker services for lawn services and invest money for Lawn Boy. What is the term for this exchange?
Barter
Lawn Boy could have hung out with his best friend Allen and had fun rather than mow lawns. The next best alternative that you give up when making a choice is known as what?
Opportunity cost
Owning shares in a company means one owns what?
stocks
What do you call an investment that is similar to an IOU, where you loan money and earn interest and the principal is returned upon maturity of the investment?
bond
Paqual wearing a headlamp to work at night is an example of "what at its finest!" according Arnold.
Entrepreneurship
A stock that is sold for less than $5 per share is known as what kind of stock?
Penny stock
What do you call the likelihood of loss?
risk
