Commerce Yearly Flashcards
Lease
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
Kitty
everyone contributes to a combined fund and the money is used for particular expenses.
Establishment costs
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.
Ongoing costs
Recurring costs e.g. rent, electricity, gas, water, telephone, groceries and travel expenses.
Fixed expenses
same amount every time, such as rent, mobile phone plan
Variable expenses
change over time, irregular basis e.g. concert
Budget
spending plan based on income and expenses
Bond
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
Arranging a lease:
- Determine type and location of premises
- 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
- Complete condition report - record of a property’s condition
- Asked to pay a reservation fee (one’s weeks rent to reserve premise while application for tenancy is being considered)
- Sign lease agreement
- 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
- A tenant must pay the rent in advance from first day of tenancy, most require two weeks’ rent in advance
- Obtaining keys
At start of tenancy, should be given by landlord or agent:
Copy of lease (tenancy agreement)
Copy of premise condition report
Bond lodgement, to be lodged by NSW Fair Trading
Keys
Insurer and Insured
Insurer - Company that provides insurance cover
Insured - Person or group that pays the premium covered by insurance
Household insurance
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
Personal Insurance:
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
Motor vehicle insurance:
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
Types of accommodation
Shared housing, university accommodation, boarding house style, rent by yourself
Factors of production
Labour - wage (workforce)
Land - rent (farm)
Capital - interest (machinery)
Entrepreneurship - profit (manager)
Labour force, working age formulas + defintions + types of employment
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)
Economic problem
unlimited wants, limited resources
Sectors of the economy
Primary - making/extracting materials, farming, mining
Secondary - turning materials into things manufacturing, construction, food, etc.
Tertiary - Providing service
Quaternary - Technological/ knowledge
Quinary - Services
Equilibrium (5 sector model)
When leakages = injections
S + T + M = I + G + X
Demand and pricr changes
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
Law of demand
As price increase → demand decrease, price decrease → demand increase (cheapskate behaviour)
Supply ( changed by price)
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
Law of supply
price increases → quantity increases, price decreases → supply decreases (business greed, can’t be bothered to produce more product when cheap, only when expensive)
Market equilibrium
Point of intersection of demand and supply curve is called market equilibrium, total quantity produced = total quantity demanded
Price mechanism
forces of demand and supply in determining the price and quantity of a good
Changes in demand (not price change)
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
Changes in supply (non-price effect)
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
4 types of markets:
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
Types of businesses
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
Corporate Social Responsibility (CSR)
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
