Business - Economics Flashcards
What is an economy?
A system of individuals, businesses, and governments that produces, sells, and buys goods and services.
What does economics study?
How groups in an economy make choices about allocating limited resources.
What is the basic economic problem?
The needs and wants are unlimited, but economic resources are limited.
What types of economies exist?
Market mixed controlled
What are economic resources?
Resources used to produce goods and services.
Define scarcity in economics.
The condition of having limited resources to meet unlimited wants.
List the components that make up an economy.
- Individuals
- Businesses
- Governments
What are the four main factors of production?
Land, labor, capital, and entrepreneurship.
True or False: Land includes all natural resources used in the production process.
True.
Fill in the blank: _______ refers to the human effort used in the production of goods and services.
Labor.
Which factor of production involves the tools, machinery, and buildings used to produce goods?
Capital.
What is the role of entrepreneurship in the factors of production?
Entrepreneurship involves the vision and risk-taking necessary to combine the other factors of production to create goods and services.
Multiple Choice: Which of the following is NOT a factor of production? A) Land B) Money C) Labor D) Capital
B) Money.
True or False: Labor can be both physical and mental effort.
True.
What is meant by ‘opportunity cost’ in the context of production?
Opportunity cost refers to the value of the next best alternative that is forgone when a choice is made.
Fill in the blank: The _______ factor of production is often considered the most critical due to its role in innovation and business development.
Entrepreneurship.
What is one example of a natural resource that falls under the land factor of production?
Water, minerals, or timber.
Multiple Choice: Which type of capital is directly involved in the production process? A) Financial capital B) Human capital C) Physical capital D) Social capital
C) Physical capital.
True or False: All entrepreneurs are business owners.
False.
What does the term ‘human capital’ refer to?
Human capital refers to the skills, knowledge, and experience possessed by an individual or workforce.
What is the primary function of capital in production?
To facilitate the production of goods and services.
Multiple Choice: Which factor of production is most associated with risk-taking? A) Labor B) Land C) Capital D) Entrepreneurship
D) Entrepreneurship.
What is the relationship between factors of production and economic output?
The combination and efficiency of factors of production directly influence the quantity and quality of economic output.
What is a common challenge faced by entrepreneurs in utilizing factors of production?
Balancing the costs and availability of resources while managing risks.
What is one way that technology impacts the factors of production?
Technology can enhance productivity and efficiency of labor and capital.
What is the definition of economic system
An economic system describes how a country chooses to control is economic resources
What are the 3 main types of economies
Market economy
Mixed economy
Controlled economy
What is a free economy?
Anyone is free to make decisions about the productions of g & s
The market determines the distribution of economic resources
Government shouldn’t interfere with the market
What is a Controlled economy
The government has a total control over the production of g & s
Citizens cannot start up businesses
Believe private enterprise is not the best way to determine the distribution of resources
What’s a mixed economy
The government and private business share the production of g & s
The government controls certain areas of the economy
what is a economic system
is the methods countries use to distribute economic resources and trade goods and services
Land definition and return
Anything that comes from nature, all natural resources and the economic return is rent
labour definition and return
the workers available to help produce the goods and services, different workers have different skills and experiences the economic return is wages
capital definitions and return
the man made resources to produce goods and services, including equipment, machines, buildings and money. The economic return is interest
enterprise definition and return
the act of bringing together the other factors of production to produce goods and services. The economic return is profit
name one example of a business
Keoghs crisps
3 examples of public sectors
police
post office
bus service
What is the irish economy like?
businesses create employment and pay tax + contribute to the local community
business compete with one another giving consumers choice and lower prices
Public sectors definition
the part of the economy that is owned and controlled by the government
private sector definition
businesses owned by individuals that produce sell goods and service with the aim of making a profit
third sector definition
social enterprises and not for profit organisations such as charities and voluntary organisations
Example and explanation of a state owned commercial
an post
these charge for their product and services
Example and explanation of non-commercial state owned
these provide services free of charge that are seen necessary to develop the country
explanation and example of a state owners private/public partnership
to provide important services and infrastructure
PPP
market definition
A place where buyers and sellers connect with each other in order to trade or exchange goods and services
final marker definition
A place where finished goods and services are bought and sold
factor market definition
where the factors of production are bought and sold
cammodities markets
where raw materials used in the production of goods and services are bought and sold eg wood
demand definition
refers to the quantity of a product that buyers are willing to purchase at a given price
effective demand definition
is a willingness to buy, backed up by an ability to pay
Law of diminishing marginal utility
the benefit or satisfaction that a consumer receives from consuming a good or services decreases over time
price definition
refers to the amount of money expected or paid for a product or sevevice
demand schedule definition
shows the number of goods demanded by customers at different price levels
Factors of affecting demand
fads and fashions -> change in consumer taste
advertising -> advertisement increased demand
season factor -> christmas decor will have high demand christmas time
inferior goods definition
an inferior good is one for which there will be less when the buyers income rises
tesco brand
supply definition
refers to the quantity of a product that producers are willing to sell at a given price
factors of affecting supply
weather can impact supply of crops
when costs are low more goods will be supplied at all different price levels causing the supply curve to shift
if new suppliers enter through market total supply will increase /price falls
supply curve
negative -> shift to the left
positive -> shifts to the right
quota definition
is a limit on the number of goods made available, the supply has a legal limit e.g finishing quota
VAT
value added tax
PAYE
pay as you earn
CAT
capital acquisitions tax
paid on gifts and inheritance
CGT
profits earned from assets - house/investments
capital gains tax
DIRT
Deposit interest retention tax
tax in saving
VRT
Vehicle registration tax
once off registration tax
stamp duty
charged on written documents or financial catds
LPT
Local property tax
PPSN
Personal public service number
what is inflation
is a sustained increase in the general level of prices from one year to the next
what’s the difference for the economy with high and low taxes
low taxes create inflation
high taxes create stable prices
what is debt servicing
paying interest on national debt
what is the corporate tax
12.5%
