1. Choose an example of a type of new company you could start, and then use this company idea to answer the questions below. You might choose a pet store, a restaurant, a tutoring business, or something else. This can be the same type of company you chose in assignment 8 or 9, or it can be different.
a. Describe the type of business you chose. (1-2 sentences. 0.5 points) * The type of business I would start would be for family or friends gatherings. This business would be place people come to eat and social, a nice, warm environment.
b. Describe at least two ways in which the local, state, or federal government would have an impact on your business. (2-4 sentences. 1.0 points) * Whether businesses owners know it or not, but the government create laws and regulation to protect the business. Two ways the government would have an impact on my business is by setting a price ceiling and price floor. These both determines whether or not my items is too high or low for its’ good.
2. Describe at least one advantage and one disadvantage of price ceilings and price floors. Do you think price ceilings and floors are more helpful or more harmful to consumers and the economy? Explain. (2-4 sentences. 1.0 points) * One advantage of price ceilings is that it helps the consumers to have a chance to buy products, and stop producers of taking advantage of such a catastrophe. The disadvantage between this price ceiling and the common ones is that the price ceiling is set on the equilibrium before the catastrophe and not under the equilibrium.
3. Describe at least two negative outcomes of having too little money and credit in the economy. (2-4 sentences. 2.0 points) * It would cause a scarcity of currency, leading to rapid deflation, and also, overproduction of goods means major markets would plummet in value, outbalancing demand, leading to major losses for the producers.