Economics

Question 1

define economics

Answer 1

economics is the study of decisions, outcomes and activity that occur as a result of a scarcity of resources. its the study of how society uses its limited resources to satisfy needs and wants

Question 2

outline the key economic problem

Answer 2

the economic problem is that peoples wants are unlimited and resources are limited, this is called relative scarcity. its a concept which describes the imbalance between unlimited wants and our limited resources

Question 3

outline the concept of opportunity cost

Answer 3

opportunity cost is the value of the next best alternative that is forgone whenever a choice is made. For example if you have $100 to buy either a dress or shoes, if you buy the shoes the opportunity cost would be the dress

Question 4

distinguish between a need and want

Answer 4

needs are goods and services that people believe are necessities of life and include food, clothing, water, health care and shelter whereas wants are goods and services that assist us to enjoy a good standard of living e.g. Mobile phones, Cars, Television. They are things we want rather than things we need to survive.
the point of difference is what you need to survive.

Question 5

what are goods

Answer 5

Goods are physical objects that command a price in the market. A muesli bar is an example of a good as it is tangible and can be transferred from one consumer to another.

Question 6

what are services

Answer 6

Services are activities that are intangible, they can’t be touched, and non-transferable which means they can’t be passed on to someone else. For example a haircut is a service because it can’t be touched and once provided to one consumer it can’t be transferred to another.

Question 7

what are the four economic resources

Answer 7

land
labour
capital
enterprise

Question 8

describe land resource

Answer 8

Natural resources are useful raw materials that we get from the Earth. They occur naturally,
meaning humans cannot make them. Instead, humans can use and modify natural resources in ways that are beneficial to us.

Question 9

describe labour recources

Answer 9

human resources describe the human work effort both physical and mental, used in production of goods and services
Examples include carpentry, teaching, hairdresser and flying planes

Question 10

describe capital resources

Answer 10

capital is all equipment (machinery, buildings, infrastructure) used by human labour in process of production
Examples include hammers, computers, desk and fencing

Question 11

der]scribe enterprise resource

Answer 11

Enterprise is when a person uses their initiative, drive and personal goals to start and maintain a business.
For example, Bill Gates used enterprise to set up Microsoft.

Question 12

what are the 3 Basic Economic Questions

Answer 12

what to produce
how to produce
for whom to produce

Question 13

explain cost and benefits

Answer 13

A benefit is what is gained from a decision.
A cost is what is given up or lost after a decision is made. The benefits and costs can be amounts of money or they can be things like how you will feel about a decision.

Question 14

state a supply factor?

Answer 14

Availability of Resources.

Weather conditions can determine if there is scarce resources or an abundance of resources

Question 15

state a demand factor

Answer 15

1 example of a demand factor is Preferences – changes is tastes and fashion, advertising campaigns and good/bad publicity.

Question 16

what is the law of supply?

Answer 16

As the price of an item increases, the quantity of that item that will be supplied by producers will increase. When the price decreases producers will be less willing to supply and therefore supply will fall.

Question 17

what is the equilibrium?

Answer 17

At some point, the demand curve will cross the supply curve.
This point is known as equilibrium; which is the moment at which the quantity producers are willing to supply exactly equals the quantity consumers will purchase. There is no shortages or surpluses.

Question 18

what is a stakeholder?

Answer 18

Any group or individual who has an interest in, or is affected by, the activities of a business or organisation. When making decisions the business or organisation needs to consider all the groups or individual who may be affected either in a positive or negative way.

Question 19

what is a market?

Answer 19

A market is any situation where potential buyers interact with potential sellers and there is a means of exchange. (A way of paying for goods and services.)

Question 20

what are 3 reasons the government may intervene in a market?

Answer 20

to stabilise the economy
to reallocate resources
to redistribute income

Question 21

What are the benefits of introducing the sugar tax

Answer 21

obesity rates will decrease and the government will gain 500 million tax to redistribute among the health area

Question 22

What are the costs of introducing the sugar tax

Answer 22

Employment. When price increase, production will decresee therefor employment will go down because there’s less work needing to be done.