Reference no: EM133311575
Questions
1. Describe a business that you what start if you were so inclined. What product or service would you sell? Describe in detail the factors of production that must be employed to run this business. Do you need land, labor, capital, natural resources or other inputs? If so list the specifics of each. What special skill set do you (the entrepreneur) need? How would you price your product or service? Is there a lot of competition in this market or will you be the sole provider (a monopolist)?
2. Give your "Positive" view of the business sector of the economy at this time (during COVID). Give your "Normative" view as to whether or not it is a good idea to start a business at this time (during COVID). Are there certain businesses that would thrive at this time? What products/services would perform well (sales) at this time? What products and services would perform poorly at this time?
3. Do you have something close to a "Comparative Advantage" in producing your product or providing your service via your business? Describe how you have the Comparative Advantage (or at least how you are better at producing your product or providing your service than everyone else - "Absolute Advantage").
4. Do you sell more product or provide more services during periods where GDP increased or during recessions (GDP decreased)?
5. Would your product or service be included in the CPI (Consumer Price Index) basket? Is it a good idea to try to sell a product or provide a service that would be included in the CPI? Why?
6. Will you need to approach the "Loanable Funds Market" to borrow money to start your business? Or are you able to start with your own money? If you are borrowing, how "sensitive" will you be to interest rates? In other words, if the rates are to high will you just not borrow money to start your business? Or are you so sure that you will "make money" that you would borrow at almost any interest rate? How much do you anticipate on asking for (how much do you need to borrow)?
7. If you were operating now during COVID, would you have to lay off some of your employees? Is your business an "essential business" (allowed to operate no matter what the lockdown restrictions are)? Would you keep some of your employees on staff even though you might have to operate your business at a loss? In other words are you willing to make a "heart-move" instead of a "head-move" in order to keep some of your employees from being unemployed during the Holidays?
8. When the Federal Reserve Bank raises or lowers interest rates (through targeting the Federal-Funds Rate), how do you suppose your business borrowing will be affected? Do you hope that the FED uses one of its tools to increase the money supply? Why or why not?
9. Does inflation affect your business at all? Does inflation affect your input prices - the things you buy to operate your business? Does it affect the price tag you put on your product or service? Are "Menu Costs" a real concern for you and your business?
10. Is your product or service something that can be exported (sold in other countries)? Would you be open to selling your product or providing your service via exports to other countries? Do you hope that the US government puts tariffs or quotas on imported goods or services that would compete with your product or service? Is your product or service something you think you can provide at a lower cost than a producer in another country?
11. Do you hope that Congress approves another stimulus package (Fiscal Policy) to put money into the hands of just about every household in the economy? What do you hope that the people will do with that money? Would your vote in a democratic election be affected based on whether or not you knew that the candidate for the House of Representatives, Senate or President would support a stimulus package? How so? In other words, who would get your vote? The one for or the one against the stimulus package? Would this mean a departure from your normal political party vote if the "other" candidate were for what you want them to do?