Economic Systems

Question 1

Characteristics of planned economy

Answer 1

Government makes all economic decisions, everyone is working class, only necessities produced, operate on social interest, income equally distributed

Question 2

Characteristics of market economy

Answer 2

No government sector, everything privately owned, high competition, capital over labour, high technology, profit incentive, not everyone receives essentials, cheaper resources to maximise profit

Question 3

Traditional economy characteristics

Answer 3

No money, self-sufficient, low technology, no specialisation, no surplus,mostly primary production

Question 4

Types of Resources

Answer 4

Land, labour, capital, enterprise

Question 5

Circular flow of income sectors

Answer 5

Firms, households, financial, government, overseas

Question 6

Economic problem

Answer 6

Inability to satisfy unlimited wants with limited resources

Question 7

Opportunity cost

Answer 7

What you sacrifice for something else

Question 8

Other names for market

Answer 8

Capitalism, unplanned

Question 9

Economic questions

Answer 9

What/how/how much/for whom to produce

Question 10

Factors affecting supply

Answer 10

Natural disasters, seasons, technology, price of resources

Question 11

Factors affecting demand

Answer 11

Season, income, advertising, complementaries, substitutes, population, tastes/preference

Question 12

Investment

Answer 12

Money injected into firms from the financial sector, lent for future benefit

Question 13

Taxation

Answer 13

A leakage of income from the households to the government

Question 14

Government spending

Answer 14

An injection of spending on essential goods and services (e.g. Health)

Question 15

Characteristics of wants

Answer 15

Recur, unlimited, change

Question 16

Good

Answer 16

Tangible item that is sold

Question 17

Service

Answer 17

Intangible concept that is sold

Question 18

Resource

Answer 18

Anyone or anything used to make a product

Question 19

Barter

Answer 19

A traditional economy that uses trade for any surplus

Question 20

Subsistence

Answer 20

A traditional economy that is completely self-sufficient

Question 21

When did life expectancy changes to 39 years for Burundian men?

Answer 21

2004

Question 22

Economics

Answer 22

The study of how to satisfy unlimited wants with limited resources

Question 23

What are the types of advertising?

Answer 23

Persuasive, informative

Question 24

Consumer

Answer 24

Anyone who uses products

Question 25

Consumer sovereignty

Answer 25

Customers decide what is sold

Question 26

Equilibrium

Answer 26

The point where the demand and supply curves meet

Question 27

Scarcity

Answer 27

The economic problem of having unlimited wants and not enough resources to satisfy them

Question 28

Leakages

Answer 28

Money that is taken from the economy

Question 29

Injections

Answer 29

Money pit back into the economy

Question 30

How does market answer the economic questions?

Answer 30

What the customers want (consumer sovereignty)
Most cost effective production
Amount determined by price mechanism
For the willing and able

Question 31

Advantages of planned economy

Answer 31

Labour over capital, low/no unemployment, everyone receives essential goods, income equality,

Question 32

Advantages of unplanned economy

Answer 32

High tech, competition

Question 33

What happens to the supply curve when it increases?

Answer 33

Shifts left

Question 34

What happens to the demand curve when it increases?

Answer 34

Shifts right

Question 35

Informative advertising

Answer 35

Tells consumers about the product

Question 36

Persuasive advertising

Answer 36

Convinces consumers to buy the product

Question 37

Law of supply

Answer 37

As supply increases, price decreases

Question 38

Law of demand

Answer 38

As demand increases, so does the price

Question 39

Price mechanism

Answer 39

The relationship between demand and supply

Question 40

What decreases supply?

Answer 40

Increased price of resources, natural disasters, off-season

Question 41

What increases supply?

Answer 41

Technology advances, decreased price of resources, season

Question 42

What increases demand?

Answer 42

Increased population/income, decreased price of substitutes/complementaries, season, preference/taste, successful advertising,

Question 43

How does the PPC show opportunity cost?

Answer 43

As one product increases production, the other must be sacrificed

Question 44

What happens at any point below the PPC?

Answer 44

Resources are not being used to their full potential

Question 45

What happens in the PPC shifts to the right?

Answer 45

Resources have increased, therefore more can be produced

Question 46

Law of increasing cost

Answer 46

Some resources are more suited to producing other products, therefore increasing the opportunity cost

Question 47

Supply

Answer 47

The amount of a product producers are willing to make for a particular price

Question 48

Demand

Answer 48

The amount of a product consumers are willing to buy at a certain price

Question 49

What techniques are used in advertising?

Answer 49

Jingles, mascots, patriotism, promotions, repetition, association, colour, experts, celebrity endorsement, memory recall, nostalgia, mascu/femininity, mystery,

Question 50

What forms of advertising are there?

Answer 50

Flyers, posters, billboards, product placement, sponsorship, pop ups, mass media, YouTube, social media, radio, to broadcast, signs, magazines, videos, newspaper, visual aid,

Question 51

How do planned economies answer the economic questions?

Answer 51

Government decides what and how to produce
Government makes 5 year plan
Produce made for everyone

Question 52

What law explains curved PPC models?

Answer 52

Law of increasing (opportunity) cost