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COMMERCE > commece\ > Flashcards

commece\ Flashcards

1
Q

Resources

A

the things used to make other things (land, labour, capital & entrepreneurial ability

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2
Q

Productive process

A

the actual making of goods and services.

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3
Q

Scarcity –

A

basic economic problem that arises because people have unlimited wants but limited resources. Because of scarcity, various economic decisions must be made to allocate resources.

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4
Q

Enterprise

A

the qualities some individuals
possess that make them able to accurately
perceive market opportunities and effectively
coordinate the production processan activity of an organisation that creates a good or service.

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5
Q

Demand

A

a consumer’s desire and willingness to buy a product or service at a given period

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6
Q

Supply

A

the amount a producer is willing to produce at a given price.

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7
Q

Law of Supply

A

As price increases, quantity supplied goes up

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8
Q

Unemployment

A

a situation where a person actively searches for employmentbut is unable to find work

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9
Q

Cyclical unemployment

A

Changes in the economic cycle, such as a downturn in the
Australian economy. Eg. A drop in demand for workers producing g & s, leading to job losses.

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10
Q

Structural unemployment

A

Where workers have skills that that are not needed by the jobs that are available.

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11
Q

Frictional Unemployment

A

when people are leaving one job to look for another, there will often be a short time of unemployment before a new position is found.

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12
Q

Seasonal unemployment

A

employment only available at certain times of the year eg. Cherry picking, ski instructing

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13
Q

IMPACTS OF UNEMPLOYMENT-

A

Loss of income
* Living standards to change
* Family stress
* People moving out of the area
* Economic/social impact

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14
Q

GOVERNMENT INTERVENTION –

A

provide an intensive form of employment assistance for those who were affected.
- aimed to support them during the transition to find new employment
- offer free TAFE courses to encourage re-training
-Offer welfare payments

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15
Q

Inflation –

A

when the average (sustained) prices of g & s rise over time

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16
Q

Disposable income

A

– money earnt from wages, dividends of shares, rent from investment property owned over a period of time.

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17
Q

Material items

A

tangible things that show our comfortable way of living, such a owning a car, rental property, mobile phone

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18
Q

Non-material items

A

things that show our well-being /quality of life (not measured with money) eg.able to have a holiday, dine out, dental care, see psychologist

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19
Q

What is Economics and an Economy

A

The study of how individuals, government and companies make choices on allocation of scarce resources to satisfy their unlimited wants.

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20
Q

Explain the difference between a good and a service

A

Good is a physical object (natural or manufactured) – clothes, watch, land
Services are intangible (cannot be seen) eg. Getting your haircut, education, airflight

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21
Q

What is an economic problem?

A

Human wants are unlimited, however the resources available to satisfy needs and wants are limited. The problem of limited resources being available to satisfy unlimited wants is called relative scarcity … this is the economic problem.

22
Q

What is relative scarcity? Briefly explain.

A

Human wants are unlimited, however the resources available to satisfy needs and wants are limited. The problem of limited resources being available to satisfy unlimited wants is called relative scarcity … this is the economic problem.

23
Q

Production process

A

the actual making of goods and services

24
Q

Economic resources

A

the things used to make other things (land, labour, capital & entrepreneurial ability)

25
Q
  • Land
  • Labour
  • Capital
  • Enterprise (management)
A

Land - Anything provided by nature, e.g. mineral reserves, forests, oceans, ocean fish, sunlight, rainfall

Labour - Mental or physical effort provided by humans eg. Teachers, tradie, dentist

Capital - the machinery, technology, plant and buildings made by people to assist in the manufacture production of g & s. Examples – computes, trucks, ladders, cranes, ships, hammer

Enterprise/Entrepreneurial ability-
Enterprise – involves the qualities some individuals posses to utilise market opportunities and effectively coordinate / manage the production process.

26
Q

Opportunity Costs.

A

The benefit of the choice foregone in the decision made.

Example, you buy the latest mobile phone and whilst you enjoy the new camera features, it now means you cannot go on a holiday for some time.

27
Q

Cost – benefit analysis pg. 13. Explain briefly.

A

A systematic process of evaluating the desirability of a decision by weighing its potential benefits and costs.

28
Q

In a simple economy name the two groups or participants or sectors.

A

Households – the consumption population of an economy

Businesses - an organization or enterprising entity engaged in commercial, industrial, or professional activities.

29
Q

Define Income and expenditure.

A

Income – money coming in (wages, shares etc.)
Expenditure – money going out / spent eg. groceries

30
Q

What are the three basic economic questions?

A
  1. What to produce? This includes how much of each product is to be produced. In Australia, this is predominantly determined by the market mechanism and the profit motive.
     2. How to produce? This includes where. It is a question of which resources to use to produce the products to be produced

   3. For whom to produce it? This becomes about who gets to consume the products produced. In Australia it is again mostly determined by markets but with some government interference.
31
Q

what is equilibrium

A

Economic equilibrium is a situation in which economic forces such as supply and demand are balanced and in the absence of external influences the (equilibrium)

32
Q

Define surplus and shortage.

A

Surplus – too much product
Shortage – insufficient product

33
Q

Factors that can affect supply and demand

A

Factors that can affect supply.
* Cost of producing the product
* Climate conditions (recent floods /drought
* Government intervention (so that everyone can have access to goods and services

  • Factors that can affect demand.
  • Prices (realistic)
  • Income of individuals (Disposable income) How much do I have left after all the other expenses?
  • Preferences /tastes
  • Government intervention
  • Fads come and go; consumers can change demand.
34
Q

Income

A

Money earned from wages, shares, rent ….

35
Q

Economic Activity

A

Economic activity is any action that involves the development, production, transfer or consumption of goods or capital.

36
Q

Measuring and Tackling Inflation
Inflation -possible reasons for

A
  1. Demand-pull inflation arises when the total demand for goods and services (i.e. ‘aggregate demand’) increases to exceed the supply of goods and services
  2. Cost-push inflation occurs when the total supply of goods and services in the economy which can be produced (aggregate supply) falls.
  3. Inflation expectations are the beliefs that households and firms have about future price increases. They are important because expectations about future price increases can affect current economic decisions that can influence actual inflation outcomes.
37
Q

Effects of Inflation

A
  1. Inflation decreases purchasing power
  2. Lowers income for consumers
  3. Raises interest rates
38
Q

What is a business plan? Why is important to have one?

A

Business Plan – outlines the objectives and goals of a business. It is a document describing a company’s business activities and how it plans to achieve its goals.Importance – ensures a business stays on track and achieve the goals set out to achieve.

39
Q

Explain the different types of businesses.
* Sole
* Franchise
* Entrepreneur
* Company

A

Sole Trader - A sole proprietorship, also known as a sole tradership, individual entrepreneurship or proprietorship, is a type of enterprise owned and run by one person
Unlimited liability (financially liable for business, if makes a loss can be personally responsible).

Franchise - A franchise is a type of license that grants a franchisee access to a franchisor’s proprietary business knowledge, processes, and trademarks, thus allowing the franchisee to sell a product or service under the franchisor’s business name.

Entrepreneur- risk taker, develop / founder of a new idea or innovation.

Company - A company is a type of business structure that is a separate legal entity from its owners.
It’s a complex business structure, with higher set-up and administrative costs because of extra reporting requirements and higher-level legal obligations.

40
Q

What type of scenarios can affect a business’s success?

A
  • New competitor
  • Government regulations / laws (COVID)
  • Decrease in demand
  • Poor location
  • Technology/ internet system goes down (optus)
41
Q

Triple bottom line

A

People planet profit

42
Q

Explain the 4 market practices?

  • Product
  • Place
  • Price
  • Promotion
A

Product - physical good
Place - where and through what service or good can be bought
Price- how much it costs to buy
promotion - how company promotes it

43
Q

Corporate responsibility

A

Corporate social responsibility refers to a business’s ability to go above and beyond legal obligations in relation to social, economic and environmental considerations. This could include the welfare of society, contribution to the local economy or impact of operations on the environment.

44
Q

Examples of how to be corporate responsible –

A
  • Use recycle goods
  • Donate to charities
  • Reduce emissions
  • Follow ethical guidelines for staff eg. Pay correct amount, have breaks, OHS regulations followed.
  • Buy Australian made products
45
Q

Balance sheet

A

The term balance sheet refers to a financial statement that reports a company’s assets, liabilities, and shareholder equity at a specific point in time.

46
Q

Current Liability

A

an amount that the business owes that must be paid within 12 months eg. Creditors

47
Q

Cash receipts journal

A

manages all cash inflows of a business organization. In other words, this journal is used to record all cash that comes into the business.

48
Q

Statement of payments and receipts

A

record of cash and payments made over a period of time.

49
Q

current asset

A

something a business expects to use or sell within a year

50
Q

non current asset

A

assets business plans to hold for more than 12 months

51
Q

non current liability

A

debts not expected to be payed within one year

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