Economics

Question 1

Economics

Answer 1

Economics is the study of the decisions, outcomes and activities that occur as a result of a scarcity of resources

Question 2

Needs

Answer 2

Needs are those things necessary fo survival

Question 3

Wants

Answer 3

Wants are things that are not necessary for survival but that we desire to make our lives better

Question 4

Relative scarcity

Answer 4

Relative scarcity is the problem of limited resources being available to satisfy unlimited wants

Question 5

Capital (economic resource)

Answer 5

Capital is not related to money it is machinery or tools. This is a factor of production

Question 6

Enterprise (economic resource)

Answer 6

Enterprise is the ability to find a gap in the market and fulfil the need, just like an entrepreneur. This is a factor of production

Question 7

Land (economic resource)

Answer 7

Land are natural resources and raw materials required in production. This is a factor of production

Question 8

Labour

Answer 8

Labour is human skill required to carry out jobs and are required in production. This is a factor of production

Question 9

Opportunity cost

Answer 9

Opportunity cost is the value of the lost alternative use to which the economic resources could have been allocated. Basically what you could’ve built instead.

Question 10

Microeconomics

Answer 10

Microeconomics is the study of the whole economy and the variables affecting it, such as unemployment, inflation, monetary and government budgetary policy.

Question 11

Macroeconomics

Answer 11

Macroeconomics is behaviour of individuals and businesses within the economy and how they interact with the market.

Question 12

Simple economy (two-sector flow)

Answer 12

Resources- Resources are given to a business in the form of employees. This is from the household sector (Sector 1) Income- income as a payment for the resources from a business. This is from the business sector (Sector 2)
Expenditure- Expenditure to pay for goods and services using the income gained. From the household sector (Sector 1)
Production- The business using the money earnt from expenditure makes new goods and services. From the business sector (Sector 2)

Question 13

Economic Growth

Answer 13

Is an increase in the real value of goods and services produced in the economy over time. This is measured in (GDP). This is the government’s objective and they want to be 3.5% each time.

Question 14

Employment

Answer 14

The Australian Bureau of Statistics (ABS) measures the level of unemployment. The unemployment rate aims to be 4-4.5%

Question 15

Inflation

Answer 15

Inflation is an economic issue that has the potential to greatly influence the performance of the Australian economy. This is measured in Consumer Prive Index (CPI)