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Lilly 3rd year > Business - Economics > Flashcards

Business - Economics Flashcards

1
Q

What is the definition of economics

A

How people and the government behave or make choices with their money and resources.

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2
Q

What is an economy?

A

An economy is a system of individuals, business and governments that produce, sells and buys goods and services.

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3
Q

2 points of scarcity in economics

A

scarcity in economic resources requires choices to be made

it states that our needs and wants are unlimited, but economic resources are limited.

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4
Q

what is financial cost

A

the price paid

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5
Q

what is opportunity cost

A

what we missed out on by making a choice

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6
Q

Name the 4 Factors of Production

A

Labour
Land
Capital
Enterprise

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7
Q

What are the factors of production?

A

The factors of production are necessary for producing goods and services

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8
Q

Explanation and economic return for Land

A

Land is all natural resources for use in the production of goods and services

The economic return is rent

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9
Q

Explanation an economic return for labour (2points)

A

The workers available to help produce goods and services

different workers have different skills and experience

Economic return is wages

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10
Q

Explanation and economic return for capital

A

The man made resources to produce goods and services

includes: equipment, machines, money and buildings

economic return is interest

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11
Q

explanation and economic return for enterprise

A

The act of bringing together the other factors of production to produce goods and services

the economic return is profit or loss

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12
Q

Definition of an economic system

A

An economic system describes how a country chooses to control its economic resources

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13
Q

The 3 types of national economies

A

Market economy
Mixed economy
Controlled economy

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14
Q

The 3 points for free economy + example

A

A free economy is where anyone is free to make decisions about the production of goods and services

the market determines who gets what resources and how they are distributed

government shouldn’t interfere with market

USA

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15
Q

What 3 things does the government control in a market economy?

A

The police force

Public services

Laws protecting consumers and workers

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16
Q

3 points on controlled economy + example

A

the government has total control over the production of goods and services

citizens are not free to set up businesses

believes that the private enterprise are not the best way to determine the distribution of resources

North korea

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17
Q

2 points on mixed economy + example

A

the government and private business share the production of goods and services

the government controls certain areas of the economy but citizens can set up businesses

ireland is a mixed economy

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18
Q

How does the mixed economy balance things?

A

In a mixed economy the government tries to balance the public good with private profit

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19
Q

The irish economy points (4p)

A

Business create employment, pay tax and contribute to the local community

Businesses compete with each other, giving consumer more choices and lower prices

The government encourages entrepreneurship

the government has a low corporate tax rate (12.5%) that attracts global businesses to locate in ireland

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20
Q

Distributions of resources in a mixed economy - individuals

A

Individuals : provide labour, pay taxes, sell land and start businesses

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21
Q

Distributions of resources in a mixed economy - Organisations

A

Provide finance to buy capital resources

Hire workers and pay taxes

make products to meet consumer needs

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22
Q

Distributions of resources in a mixed economy - government

A

employs workers, collects taxes, pay for public services

provides grant aid, encourages enterprise

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23
Q

Definition of public sector

A

the part of the economy that is owned and controlled by the government

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24
Q

describe private sector

A

Businesses owned by individuals that produce and sell goods and services with the aim of making a profit

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25
Q

definition of third sector

A

Social enterprises are not for profit organisations such as charities and voluntary organisations

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26
Q

department of health

A

Hospitals, treatment, surgeries, healthcare

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27
Q

department of education and skills

A

Education, schools, state examinations

28
Q

department of culture

A

Protection of Ireland’s heritage and Irish language

29
Q

department of communications

A

responsible for telecommunication and broadcasting

30
Q

State owned commercial

A

These charge for their product and services example an post

31
Q

State owned non-commercial

A

These product services free of charge that are seen necessary to develop the country librwry

32
Q

Public/private partnerships state owned

A

To provide important services and infrastructure

33
Q

Market definition

A

A place where buyers and sellers connect with each other in order to trade or exchange goods and services

34
Q

Final market definition

A

A place where finished goods and services are bought and sold

35
Q

Factor markets

A

Where the factors of production are bought and sold

36
Q

Commodities markets

A

Where raw materials used in the production of goods and services are bought and sold example serial, land

37
Q

demand definition

A

Refers to the quantity of a product that buyers are willing to purchase at a given price

38
Q

effective demand

A

Is a willingness to buy backed up by an ability to pay

39
Q

Three consumer behaviour assumptions

A

rational/will purchase cheaper option
Consumers will get as much benefit or satisfaction as possible from their limited resource
The benefit or satisfaction that consumer receives from consuming a good or service decreases overtime this is the law of diminishing marginal utility

40
Q

Price definition in economics

A

Reversed an amount of money expected or paid for product or service

41
Q

Demand schedule

A

Shows the number of goods demand but demanded by customers at different price levels

42
Q

Demand schedule

A

Shows the number of goods demand but demanded by customers at a different price level

43
Q

Substitute good

A

Buying a little brand instead of a Coke

44
Q

demand curve

A

Is a graph that illustrates the expected demand for product at a various price level

45
Q

Other factors affecting demand

A

Demand for product can be affected by other factors apart from price. A change in these factors will cause the demand curve to shift left or right.

46
Q

Price of substitute good

A

if the price of substitute goods product is reduced, consumers will demand more of the substitute, which may reduce demand for other products

47
Q

Price of complementary good

A

A complementary good is a product that is used with another product, e.g. toothbrush and toothpaste or paper and pen

48
Q

fads and fashions

A

As consumers taste change, demand for products will also change, fashionable goods or brands will see a sharp increase in demand, while those that are unfashionable will experience reduce levels of demand

49
Q

advertising

A

Products that are heavily advertised missing an increase in demand, especially in the short or medium term

50
Q

advertising

A

Products that are heavily advertised may see an increase in demand, especially in the short or medium term

51
Q

Changes in population or market size

A

An increase in birth rate will lead to increase demand for baby products

52
Q

seasonal factors

A

Demand for some products changes depending on the time of year e.g. Christmas decorations

53
Q

Price expectations of buyers

A

if buyers expect goods to increase in the future. They may increase current demand to try beat the price area.

54
Q

Income levels

A

Most goods are normal goods, because if a persons income increases, they will be able to buy more expensive goods and services. For example they may choose to buy a more expensive car.

55
Q

Normal goods

A

A normal good is the one that will be in greater demand when the buyers income rises

56
Q

Inferior goods

A

An inferior good is one for which there will be less demand when the buyers income rises e.g. Tesco brand items

57
Q

Environmental conditions

A

Weather can impact the supply of crops available

58
Q

Environmental conditions

A

Whether can impact the supply of crops available?

59
Q

production and development costs

A

Producers of goods and services incur costs, e.g. transport costs. When cost low, more goods will be supplied at all different price levels, causing the supply curve to shift right.

60
Q

Technology

A

Helps businesses be more efficient and productive. The result is increased use of technology which will lead to production cost being reduced and an increase in supply.

61
Q

The number of suppliers

A

If a new supplier enter our market, total (aggregate) supply will increase and price will fall

62
Q

Expectations of sellers

A

If sellers expect prices to increase, they may store current supplies in the hope of selling them at a higher price in the future

63
Q

Government intervention

A

Supply will also be reduced where quotas are applied

64
Q

Government intervention

A

Supply will also be reduced where quotas are applied

65
Q

quotas

A

a quota is a limit on the number of goods made available, e.g. fishing quota. This means that the supply available has a legal limit.

66
Q

quotation

A

Lilly 3rd year (9 decks)

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