Commerce - Economics

Question 1

Economy

Answer 1

a system that involves the production, distribution, trade and consumption of goods and services by individuals, businesses, organisations or governments

Question 2

Opportunity Cost

Answer 2

The value of the next best alternative use of resources

Question 3

Profit

Answer 3

The amount of money a business earns after taking away its expenses

Question 4

Revenue

Answer 4

The income a business receives from its businesses activities, such as the sale of goods and services to customers

Question 5

Exchange Rate

Answer 5

The amount of one currency that can be exchanged for another at a particular point in time

Question 6

Injection

Answer 6

Money that enters the economy

Question 7

Leakage

Answer 7

Money that leaves the economy

Question 8

Globalisation

Answer 8

The increasing interconnectedness of countries around the world

Question 9

Commodities

Answer 9

Raw materials/agricultural products that can be brought and sold

Question 10

Economies of scale

Answer 10

Savings in costs resulting from higher levels of production

Question 11

Imports

Answer 11

Goods and services purchased from another country

Question 12

Exports

Answer 12

Goods and services purchased by another country

Question 13

Resource - Natural

Answer 13

Input from nature, such as water, forests or fertile land, used in the production of goods and services

Question 14

Resource - Labour

Answer 14

A person’s intellectual or physical skills needed to produce a good or service

Question 15

Resource - Capital

Answer 15

Input from manufactured goods, such as machines or computers, that is used to produce further goods and services

Question 16

Scarcity

Answer 16

The idea that we have limited resources but unlimited demmand

Question 17

What are the three economic questions that must be asked

Answer 17

• What is being produced?
• How is it being produced?
• Who is it produced for?

Question 18

Economy Type - Traditional

Answer 18

an economic system in which people produce enough for their own needs through methods such as hunting, gathering and farming; money is not used

Question 19

Economy Type - Market

Answer 19

an economic system in which private individuals exchange goods and services with consumers in a free marker, and, in return, keep the profit

Question 20

Economy Type - Planned

Answer 20

an economic and political system where the government of state predominantly owns the resources and decides what goods and services to produce, how to produce them, and who they will be distributed to

Question 21

Economy Type - Mixed

Answer 21

an economic system in which resources are owned by a mix of government and private enterprise

Question 22

Participants in the Economy - Consumers

Answer 22

• Buy goods and services
• Earn wages and salaries
• Pay taxes
• Receive government benefits
• Save

Question 23

Participants in the Economy - Producers

Answer 23

• Produce goods and services
• Aim to make profit
• Pay wages
• Pay taxes
• Borrow money
• Import and export goods and services

Question 24

Participants in the Economy - Government

Answer 24

• Charge taxes
• Pay wages
• Buy goods and services
• Provide benefits, payments and services to citizens
• Borrow money

Question 25

Participants in the Economy - Financial Institutions

Answer 25

• Hold savings
• Lend money
• Aim to make profit
• Pay taxes

Question 26

How is Australia linked to the global economy?

Answer 26

• Trade
• Investments
• Technology and communication

Question 27

Why is trade important?

Answer 27

• Source of income
• Provides goods and services at lower prices
• Provides access to products not made in Australia
• Opportunity to specialise in an area of expertise