Commerce Yearly

Question 1

Lease

Answer 1

a legal contract between a tenant and a landlord that allows the tenant to use the landlord’s property in return for rental payments. Once signed, is a legally binding document

Question 2

Kitty

Answer 2

everyone contributes to a combined fund and the money is used for particular expenses.

Question 3

Establishment costs

Answer 3

one-off costs that are involved in setting up your new place, e.g. rental bond, internet connection, essential white goods such as a refrigerator and washing machine, and furniture.

Question 4

Ongoing costs

Answer 4

Recurring costs e.g. rent, electricity, gas, water, telephone, groceries and travel expenses.

Question 5

Fixed expenses

Answer 5

same amount every time, such as rent, mobile phone plan

Question 6

Variable expenses

Answer 6

change over time, irregular basis e.g. concert

Question 7

Budget

Answer 7

spending plan based on income and expenses

Question 8

Bond

Answer 8

money that is lodged with the Rental Bond Board. It is used to cover any damages
or cleaning costs if the rented premises are left in an unsatisfactory condition

Question 9

Arranging a lease:

Answer 9

1. Determine type and location of premises
2. Obtain copy of residential tenancy agreement from agent - a legally binding agreement between the landlord and the tenant that outlines all terms that both parties (landlord and tenant) must follow
3. Complete condition report - record of a property’s condition
4. Asked to pay a reservation fee (one’s weeks rent to reserve premise while application for tenancy is being considered)
5. Sign lease agreement
6. Pay rental bond , usually 4 week rent pay, lodged by landlord at the Rental Bond Board, operated by NSW Fair Trading, used to cover landlord for any damages to property or other forms of breaking the agreement e.g. vacating
7. A tenant must pay the rent in advance from first day of tenancy, most require two weeks’ rent in advance
8. Obtaining keys

Question 10

At start of tenancy, should be given by landlord or agent:

Answer 10

Copy of lease (tenancy agreement)
Copy of premise condition report
Bond lodgement, to be lodged by NSW Fair Trading
Keys

Question 11

Insurer and Insured

Answer 11

Insurer - Company that provides insurance cover
Insured - Person or group that pays the premium covered by insurance

Question 12

Household insurance

Answer 12

Home insurance - Covers home against a damage and destruction to building, note exclusions and inclusions
Home contents insurance- Compensation for home contents damaged or stolen

Question 13

Personal Insurance:

Answer 13

Life insurance - person die, money to next of kin/ other nominated
Sickness and accident insurance - taken by those with no workers’; compensation/ sick leave
Health insurance

Question 14

Motor vehicle insurance:

Answer 14

Compulsory third party - protects drivers from compensation costs if kill or injure someone
Third party property damage - cover for damage caused to someone else’s vehicle or property, if you’re liable for it.
Comprehensive motor vehicle insurance - Covers cost of repairs/ replacement for both insurer’s vehicle and vehicle damage they are liable of

Question 15

Types of accommodation

Answer 15

Shared housing, university accommodation, boarding house style, rent by yourself

Question 16

Factors of production

Answer 16

Labour - wage (workforce)
Land - rent (farm)
Capital - interest (machinery)
Entrepreneurship - profit (manager)

Question 17

Labour force, working age formulas + defintions + types of employment

Answer 17

Labour force - Everyone who is able to work, either employed and unemployed
Working age - Everyone is is aged 16-64, no matter if they can work or not
Unemployment rate = Unemployed/labour force (Unemployed + employed) x 100%
Participation rate = Labour force (Unemployed + employed) / working age population x 100%
Unemployment types: Cyclical (business cycle), Structural (change in society), Seasonal (farmer), Frictional (moving jobs)

Question 18

Economic problem

Answer 18

unlimited wants, limited resources

Question 19

Sectors of the economy

Answer 19

Primary - making/extracting materials, farming, mining
Secondary - turning materials into things manufacturing, construction, food, etc.
Tertiary - Providing service
Quaternary - Technological/ knowledge
Quinary - Services

Question 20

Equilibrium (5 sector model)

Answer 20

When leakages = injections
S + T + M = I + G + X

Question 21

Demand and pricr changes

Answer 21

quantity of a product that consumers are willing to purchase at a particular price at a given point in time

Expansion occurs when price decreases and quantity demanded increases, going down the demand curve
Contraction occurs when price increases and quantity demanded decreases, going up the demand curve

Question 22

Law of demand

Answer 22

As price increase → demand decrease, price decrease → demand increase (cheapskate behaviour)

Question 23

Supply ( changed by price)

Answer 23

refers to the quantity of a good or service that businesses are willing to produce at a given price, at a given point in time

Expansion occurs when price increases and quantity supplied increases, going up the supply curve
Contraction occurs when price decreases and quantity supplied decreases, going down the supply curve

Question 24

Law of supply

Answer 24

price increases → quantity increases, price decreases → supply decreases (business greed, can’t be bothered to produce more product when cheap, only when expensive)

Question 25

Market equilibrium

Answer 25

Point of intersection of demand and supply curve is called market equilibrium, total quantity produced = total quantity demanded

Question 26

Price mechanism

Answer 26

forces of demand and supply in determining the price and quantity of a good

Question 27

Changes in demand (not price change)

Answer 27

Changes in demand (e.g. changing preferences/tastes, size of population, substitute) result in increase/decrease of demand curve (shifting left or right)

Increase in demand shifts the demand curve right, resulting in increase in price and quantity demanded
Decrease in demand shifts the demand curve left, resulting in decrease in price and quantity demanded

Question 28

Changes in supply (non-price effect)

Answer 28

Changes in supply (e.g. efficiency, cost of production, climatic conditions) result in increase/decrease of demand curve (shifting left or right)

Increase in supply shifts the supply curve to the right, resulting in decrease in price and increase in quantity supplied

Decrease in supply shifts the supply curve to the left, resulting in increase in price and decrease in quantity supplied

Question 29

4 types of markets:

Answer 29

Retail Markets - goods and services
Labour Markets - Employees are hoping to sell or supply their labour to employers. Those employers wish to buy or demand the skills and effort of suitable employees.
Financial Markets - The intermediaries between the savers and the borrowers in an economy.
Stock Markets - shares of companies

Question 30

Types of businesses

Answer 30

Online business - uses online infrastructure, run using the internet
On Demand Businesses - use mobile technology such as apps/websites to maximise consumer convenience.
There are 4 classifications for the size of a business
Micro business → fewer than 5 employees
Small businesses → 5-20 employees
Medium business →20-199 employees
Large business → 200 or more employees

Small to medium enterprises (SMEs) make up 98% of businesses in Australia and 7 million employment

Global businesses (Transnational corporations TNCs) - has branches in different countries

A not-for-profit business provides services to the community and does not earn a profit for its owners.
Offshore - When an offshore entity is established, its principal business is in a separate nation.
A not-for-profit business provides services to the community and does not earn a profit for its owners. Less tax

Question 31

Corporate Social Responsibility (CSR)

Answer 31

The consideration of the societal and environmental impact of a business, ethical decision-making, going above and beyond legal requirements to benefit society and the environment, useful for long term