Questions and Answers >ACCESS Virtual Learning 2022._University of South Alabama EH 102 _ 1.02 Small

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1.02 Small Business and Economics Total Points: 50 Using what you have learned from the first two lessons in this course, answer the following questions.

1. What is the difference in a need and a want?

Write your response below: A need is something necessary for survival. A want is not necessary and is purchased for pleasure.

2. What is discretionary income?

Write your response below: The income left for “wants” after taxes and the necessities are deducted from the full income.

3. Compare the operation of a big box store to a small business.

Write your response below: A big box store provides a competitive price range for products and has the financial power and resources to buy more product than a small business. The ability to display more products and high stock allow big box stores to make more money than a small business which can only buy to their financial extent, paying more than the big box store and have to charge the consumer more.

4. Explain how a small business can compete with a big box store to be successful.

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Providing a unique service or good allows a small business to compete with big box stores.

5. Explain a challenge of a small business owner.

Write your response below: Keeping prices withing a competitive range while making profit

6. What is the law of supply and demand and how does it affect prices?

Write your response below: If there is high demand for a product and low supply the price for the product goes up. If there is low demand with high supply the prices go down.

7. What does inelastic mean in economics?

Write your response below: The demand for the product or service is consistent and allows small businesses in a inelastic demand situation to succeed.

8. What are some reasons why the failure rate of small businesses is so high?

Write your response below: If their product doesn’t have a high demand in the area of the business. The business won’t make enough money to maintain the business if the demand for the product is already met.

9. Describe a successful small business or entrepreneur in your area and explain why you think they are successful.

Write your response below: Mad Dogs is a tobacco and alcohol store. I believe this small business is successful

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because the demand for those products is ineleastic and people will always buy it. The business has been around long enough to provide good quality and a competitive price while making a profit.

10. How do small businesses and entrepreneurs influence the U.S. Economy?

Write your response below: They drive the local enonomy which invests the money spent into the country through taxes. They create more jobs for American citizens and bring in half of the GDP of the country. These factors all contribute to the influence of small business on the economy.

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