Unit 2: Circular Flow, Business Org, Market Structures

The reliance on one another to provide the resources and goods and services that people need.

• Law of demand

• Businesses

• Factor market

• Economic interdependence

The SOLID arrows on this circular flow diagram represents the flow of

• Productive Resources, Goods and Services

• Imports

• Taxes

• Money

The DASHED arrows on this circular flow diagram represents the flow of

• Productive Resources, Goods and Services

• Money

• Taxes

• Imports

Use the following headlines to answer the question below.

·Many sellers in market

·Products are identical

·Easy to enter and exit the market

·Price takers

The above headlines are all examples of

• Monopolistic competition

• Pure (perfect) competition

• Oligopoly

• Monopoly

Use the following headlines to answer the question below.

·Many sellers in market

·Product must be different to attract consumers

·Lots of advertising

·Easy to enter and exit the market

The above headlines are all examples of

• Oligopoly

• Monopolistic competition

• Monopoly

• Pure (perfect) competition

Use the following headlines to answer the question below.

·Most common form of business organization

·Easy to start

·Disadvantages: Limited access to funds

The above headlines are all examples of

• Partnership

• Monopoly

• Corporation

• Sole proprietorship

Labor that is supplied to businesses by households for the production of goods and services are part of the:

• Product Market

• Consumer Price Index

• Resource or Factor Market

• Goods Market

Susan works for the state of Georgia as a probation officer. Her labor provides the government with a service, and in return she is paid by the state. With her salary, Susan buys goods she needs from private firms. She also pays taxes to the government so they can continue to provide public services that people need. Susan’s economic interdependence with the government and private businesses is referred to as

• economic independence

• the monetary cycle

• the money flow

• circular flow of economic activity

Use the following headlines to answer the question below.

·Owned by shareholders

·Access to large amounts of funds for expansion

·Disadvantages: Double taxation

The above headlines are all examples of

• Corporation

• Monopoly

• Sole proprietorship

• Partnership

Jane and Jill run a photography business as a partnership. They are trying to decide if they wish to form a corporation. If they decide to incorporate, what will be a new disadvantage they will face?

• Ease of startup

• Double taxation

• Unlimited liability

• Sharing of profits