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Economics > Chapter 3: Economic Pursuits > Flashcards

Chapter 3: Economic Pursuits Flashcards

1
Q

What is Globalisation?

A

The worldwide interfacing and interaction of economies with trade as a key element and ICT making it possible

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2
Q

What are the properties of Developing countries?

A
  • Fewer goods and services at disposal
  • Low standard of living
  • Long time for the economy to progress
  • Short life expectancy
  • High illiteracy
  • Based on Primary and Secondary economic activity
  • Low skilled labour
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3
Q

What are the properties of Developed countries

A
  • Many goods and services at disposal
  • High standard of living
  • Short period of time for economy to progress
  • Long life expectancy
  • High literacy
  • Tertiary production
  • Highly skilled labour
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4
Q

How did the early indigenous society live?

A
  • They had to depend on nature to satisfy their needs

- They turned to agriculture to satisfy needs reliably

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5
Q

How long did the traditional self-sufficient society last?

A

From the 400s to the 1000s

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6
Q

Why did people give up their nomadic ways of life?

A

They established themselves on the land and began domesticating animals

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7
Q

Why did they not experiment with farming methods?

A
  • They used methods that were successful in the past

- A small error could mean crop failure/starvation

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8
Q

What is subsistence agriculture?

A

When people only consume the crops they produce and the animals they keep
They do not produce for markets

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9
Q

What are manors?

A

Large estates of Land in the 800s of western Europe

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10
Q

What are landlords?

A

people who ruled manors

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11
Q

What is barter trade?

A

The exchange of a good or service for another good or service

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12
Q

Why did barter trade not work well?

A

Surplus production and variety increased beyond levels of immediate needs.

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13
Q

when were coins minted?

A

in 610 CE by the king of Lydia

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14
Q

What is money?

A

Money is a medium of exchange

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15
Q

Among whom was money first used?

A

Among the upper class

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16
Q

when was the western alphabet developed?

A

in 1350 BCE

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17
Q

What are bridge languages?

A

A language spoken between people for whom it is not the mother tongue

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18
Q

When was German a bridge language?

A
  • between the 1200s and 1600s
  • French language followed
  • English took over
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19
Q

What did the acceptance of language, alphabets and numbering result to?

A

Documented transactions, contracts and property descriptions

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20
Q

How were skills acquired?

A

on the job

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21
Q

How were people taught skills?

A

Experienced people had to teach young children

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22
Q

What is apprenticeship?

A

A system of training of a skill on the job

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23
Q

Why was illiteracy very high for most of the population?

A
  • Literacy was associated with civil administration, law, long distance relation, religion etc.
  • Formal schooling was only available to part of the population
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24
Q

Why was wealth not related to economic activity?

A

Society had not integrated production of wealth with production of goods

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25
Q

Why did peasants remain poor?

A

accumulation of wealth was a matter of political and military power

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26
Q

What was wealth used for?

A

To support the king’s and landlord’s powers but not the economy

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27
Q

Why were surpluses produced?

A

Agriculture prospered and local markets were established

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28
Q

What changes were made to production?

A

Production methods that were specialized and deliberate, this meant producers started to accept risk
Gradually, produce was offered in markets

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29
Q

how did merchants become middle persons?

A

farmers offered goods in markets

Merchants bought from farmers and sold to the public

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30
Q

How did development grow?

A

Similarly to agriculture, development took place with production of other goods
Travelling merchants traveled long distances to sell goods at fairs

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31
Q

What were the role of merchants?

A
  • They traveled to sell goods produced locally.
  • They used bookkeeping to record transactions
  • They insisted payment in money
  • They sold goods to local retailers creating local markets
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32
Q

Where were canals developed?

A

In Europe and England

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33
Q

Why were road networks and waterways extended?

A

The Renaissance increased economic and trade activities along these routes

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34
Q

What did Marine transport rely on?

A

It relied on person and wind power

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35
Q

How did towns and cities build up?

A
  • Towns sprang up along main trade routes
  • Towns grew larger
  • Merchants settled permanently in towns
  • Peasants left manors to look for work in towns
  • They became craftsmen
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36
Q

What is Economic Growth?

A

The steady increase in the output of goods and services enjoyed by a society started with those societies that enjoyed perfect economic liberty

37
Q

How did specialisation begin?

A

It began when producers provided goods and services desired by others, it started with labour specialisation

38
Q

Why were separate buildings for production erected?

A
  • Goods that were produced in houses where producers lived where inconvenient because of limited space
  • Production was easily controlled
39
Q

How was labour specialisation created?

A

In separate buildings workers specialised in specific tasks to increase total output in less time

40
Q

What is a guild?

A
  • Guilds were like unions for employers

- Each guild had a set of rules setting out training and responsibilities of members

41
Q

What was practiced by guilds?

A

Product specialisation

42
Q

What is mercantile law?

A

A system of laws based on custom and best practice by merchants

43
Q

How was mercantile law enforced?

A

Through a system of merchant courts along main trade routes

44
Q

How did mercantile law function?

A

It functioned as an international law of commerce
It emphasized contractual freedom
It made the right to sell and buy property possible

45
Q

What is contractual freedom?

A

The freedom to enter or exit a contract

46
Q

Why was capital required?

A

Demand for goods grew

Capital was required to finance growth of businesses

47
Q

What is a sole proprietor?

A
  • A one-person business where the owner is solely responsible for success or failure of the business
  • Unlimited Liability
48
Q

What is a partnership?

A
  • When partners shared liability and brought capital and skills to the business
  • Unlimited liability
49
Q

What does technological progress refer to?

A

The development and application of tools, devices, equipment, machines and techniques for manufacturing and production processes

50
Q

What did machines consist of?

A

Interrelated parts that combine to perform work.

Input energy may be from humans, animals, nature or other sources

51
Q

What was water used for by the end of the 1600s?

A

An energy source to drive watermills

important to grind flour, saw lumber, produce textiles and shape metal

52
Q

What was wind used for by the end of the 1600s?

A

An energy source to turn windmills
Windmills did the same as watermills
Ships used wind power to sail

53
Q

How did money evolve?

A

It became a universal medium of exchange and a store of value

54
Q

How was the value of coins implemented?

A

The value of the coins was equal to the value of their metal content

55
Q

What is a legal tender?

A

Coins or banknotes that could not be refused in trade

56
Q

When were the first proper banknotes put into circulation?

A

In 1660

57
Q

What are savings?

A

Income that is not spent, it represents a claim on goods and services that can be exercised at a later date

58
Q

What was the earliest form of saving?

A

Hoarding

59
Q

How was the modern idea of a piggy bank developed?

A

In ancient times, pieces of metal and coins were stored in clay pots

60
Q

How did people save from the 1400s?

A

By leaving surplus balances in deposits at banks

Engaging in contractual saving

61
Q

What happened to the manorial system?

A

It declined and collapsed

62
Q

What was the result of voyages of discovery?

A
  • Explorers brought precious metals from countries and put it into circulation as money
  • It caused price disruption
63
Q

What was mercantilism based on?

A

the view that the state had to regulate economic activities in order to acquire as much as possible of precious metals

64
Q

How were people taxed?

A

Individuals: Merchants: Businesses&Ind

  • poll tax -toll tax -Land and property
  • income tax -customs duties tax -Sales tax
  • excise tax
  • inheritance tax
65
Q

What is infrastructure?

A

Physical structures that support a society

66
Q

What does infrastructure facilitate?

A

The production of goods and services

67
Q

What is an economic system?

A

The mechanism that communicates the wants of consumers to producers

68
Q

What was the traditional system?

A

Consumers were also Producers
People didn’t have a choice
They produced products they wanted to consume
They domesticated animals

69
Q

What was manorialism?

A

The base that provided necessary food

Each village was self sufficient on the manor

70
Q

How was mercantilism enforced?

A

power was in the hands of the monarch
There was central administration
Centralization of economic power
Capitalism

71
Q

What is public finance?

A

A field of economics concerned with paying for collective or governmental activities and with the administration and design of those activities

72
Q

What problems did the earliest governments experience?

A

Problems in gaining resources needed to perform functions they desired

73
Q

How did the governments take advantage of money?

A

They taxed their citizens

74
Q

What is economic policy?

A

strategies and measures adopted by a government to manage the economy as a means of achieving its economic objectives

75
Q

When did economics as a science emerge?

A

With Adam Smith’s treatise - ‘the wealth of nations’ in 1776

76
Q

What did Karl Marx’s ideas pave way for?

A

Ideas on central planning later known as comminism

77
Q

When was large scale manufacturing introduced?

A

During the time of the industrial revolution

78
Q

How did manufacturing change with industrial revolution?

A

It was very limited in the past but became the major economic activity

79
Q

What was a result of labour specialization?

A
  • Increase in productivity
  • Higher profits
  • More investment
  • Economic growth
  • Improvement in standards of living
80
Q

What is invention?

A

The discovery of new knowledge

81
Q

What is innovation?

A

An improvement of existing knowledge into the product

82
Q

How did steam affect the industries?

A
  • It powered a wide range of manufacturing machinery
  • manual and animal driven machines were replaced with steam
  • It lead many transport systems
  • It was followed by electricity
83
Q

How did mechanization of production start?

A

The industrial revolution lead to this
Large factories with large scale production were set up
Production lines were created

84
Q

What did the high density of people in urban areas create?

A

A huge demand for a wide variety of goods and services
Stimulation of development of markets of all kinds
New kinds of enterprises were established
Regional, national and international markets developed

85
Q

What did accelerated demand for food lead to?

A

The commercialization and mechanization of farming

86
Q

What lead to migration?

A

The rising industrial centers of the world attracted migrants
Migration was made easier with better transport techniques
Ocean shipping was made significant
colonialism lead to an accelerated pace of migration

87
Q

When did the period of mechanization and mass production start?

A

At the beginning of the 1850s

88
Q

What were limited liability laws?

A
  • People who put money into the business received shares, but if the business failed, they were responsible
  • This changed, a person’s financial liability was limited to the sum paid for the shares only
89
Q

How did labour unions form?

A

As new industrial technologies entered economy after economy, the organisation workers in unions followed

Economics (4 decks)

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