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Year 10 Flash Cards > Commerce - T3 > Flashcards

Commerce - T3 Flashcards

1
Q

What is economics?

A

The study of scarcity

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2
Q

What is scarcity

A

the study on how people and groups use their limited means to obtain those things people need and want

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3
Q

What are needs

A

What you need in order to survive

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4
Q

What are wants

A

Things you desire to have but don’t need to survive

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5
Q

What are your limited means

A

Time - only 24 hours in a day
Skills - no one has unlimited skills
Money - no one has unlimited money

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6
Q

What does every decision create

A

Opportunity cost

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7
Q

What is opportunity cost

A

the next best alternative when a choice is made

eg a person can either buy a shirt or pants. If she buys the shirt the pants are her opportunity cost

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8
Q

What is a choice

A

making a selection from different alternatives

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9
Q

What are values

A

The principles and beliefs upon how we make our decisions

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10
Q

How do you describe a change in the demand curve

A

When the price of ____ (product) falls/increases from $_ to $_, quantity demand will increase/decrease from __ to __ of (product)

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11
Q

What is demand

A

the quantity of a good or service that a consumer is willing and able to buy at a range of prices

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12
Q

What is the law of demand

A

as a price of a good increases, the quantity demanded will decrease (vise versa) assuming ceteris paribus

When the price goes down the quantity demanded goes up
When the price goes up the quantity demanded goes down

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13
Q

What is ceteris paribus

A

A Latin term that means all other factors remain the same/are held constant

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14
Q

The amount a consumer buys at each price is called…

A

quantity demanded

If the price changes then quantity demanded will also change

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15
Q

What is a demand schedule

A

shows the relationship between the price of a good and a quantity demanded of that good

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16
Q

What is changes in demand

A

If a factor other than price changes (non-price factors) then the amount the consumer is willing and able to buy at each price may change. This means a whole new demand schedule and the whole demand curve shifts

17
Q

What are non price factors affecting demand

A

income
tastes and preferences
change in the price of a substitute good
change in the price of a complimentary good

18
Q

What is a substitute good

A

one that can be used instead of the original good eg Pepsi and Coke

if the price of a substitute changes, this may make a existing good more or less attractive to the consumer

19
Q

What is a complimentary good

A

one that is traditionally used with the original good eg hot chips and ketchup

If the price of a complimentary good changes, this may change the demand for the existing good

20
Q

What is supply

A

the amount of a good or service that a producer is willing and able to sell at various prices at a certain time.

21
Q

What is the law of supply

A

as the price of a good or service increases, the quantity supplied will increase, vice versa, assuming ceteris paribus

22
Q

What is a supply curve

A

When a change in price will cause a movement along the curve

23
Q

How to describe a change in the supply curve

A

If a price decreases/increases from $_ to $_ the quantity supplied will decrease/increase from _ to _. Ceteris paribus

24
Q

What is changes in supply

A

If factors other than price change occur then there is a change in supply and a shift of the supply curve

25
Q

What are the causes of an increase in supply

A

decrease in costs of production
decrease in an indirect tax (sales tax, GST)
a subsidy is given to producers (payment to firms to reduce costs)
a tax on imports (tariff) is removed

26
Q

What is the market

A

a place or situation where buyers and sellers exchange money for goods and services.

they may be local or international, have few buyers or many, be in a shop or operate online

27
Q

What is market demand

A

the total quantity demanded by all consumers willing and able to buy the good or service. It is the horizontal sum of all individual demand curves at each price

28
Q

What is market supply

A

the total quantity supplied by all producers of the product. It id the horizontal sum of all individual firms supply curves at each price

29
Q

How are prices determined in the market

A

by the interaction of buyers and sellers in the market. The price will be set at market equilibrium

30
Q

What is market equilibrium

A

where the quantity demanded for a product is equal to the quantity supplied of the product (Qd = Qs) We call this equilibrium quantity (We) and equilibrium price (Pe)

31
Q

What is disequilibrium

A

where the market is out of balance

32
Q
A

Year 10 Flash Cards (18 decks)

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