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Commerce > Economics > Flashcards

Economics Flashcards

1
Q

Economics def

A

The study of choices and outcomes.
How these affect society
How to divide and distribute the limited resources that are available

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2
Q

Wants

A

Something used to for fill desires and not necessary for survival

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3
Q

Needs

A

Necessary for survival

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4
Q

Relative scarsity

A

Referred to as the economic problem
Limited resources but unlimited wants.
Goods and services made to satisfy wants

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5
Q

Opportunity cost

A

the loss of alternative options when another is chosen

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6
Q

Economic resources

A

Land (natural resources)
Labor (human effort)
Enterprise (marketing)
Capital (machinery)

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7
Q

Production Process

A

Inputs (economic resources)> Production> Outputs (goods and services)

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8
Q

Markets

A

Where potential buys and sellers meet in order to purchase, sell, barter or trade items

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9
Q

Market types

A

Traditional, Planned, Free market,

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10
Q

Traditional market

A

a small community, centered on survival (they are their own buyers and sellers)

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11
Q

Planned markets

A

Large amount of government intervention they own resources

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12
Q

Free market

A

decisions made by consumers
Uses price mechanism
Suppliers respond to consumer demand

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13
Q

Economic questions

A

What, How and for whom to produce for

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14
Q

Economy

A

a countries production and consumption of goods and services

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15
Q

Standard of living

A

An individuals materials wealth or non material issues(pollution, traffic, etc

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16
Q

Price mechanism

A

where the profits of goods and services affect the supply and demand of the goods and services

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17
Q

Consumer demand

A

Ability and willingness to pay
Abilty- enough money to pay asking prices
Willingness- want for the product

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18
Q

Producer supply

A

Quantity of the product that they are willing and able to supply

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19
Q

Equilibrium

A

Where consumer demand= Producer supply/ Demand=Supply

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20
Q

Law of demand

A

Price increases= demand decreases
Price decrease= Demand increases
-Price influences demand

21
Q

Substitues

A

Alternative products that does the same function as the original product

22
Q

Complementary products

A

Products that pair with anohter

23
Q

Factors of demand

A

=Shift in demand

24
Q

Law of supply

A

Prices increase= Supply increases
Prices decreases= Supply decreases

25
Q

Factors of supply

A

Taxes, tech product price, input, availability/resources, Natural phenomena

26
Q

Surplus

A

lowered price, too much supplt; not enough demand

27
Q

Shortage

A

Demand increases too little supply

28
Q

Benefits of price mechanism

A

-Reduces surplus/shortage
efficient resource allocation by suppliers
consumer determines which of their wants are most important

29
Q

Gov correction of externalities

A

Strategies like taxes and subsides

30
Q

Taxes

A

Fees charged by government on activities income or products
- Can tax negative externalities to prevent production and consumption

31
Q

Subsides

A

Sums of money from government, to help businesses keep product prices low
- only beneficial products

32
Q

Externalities

A

Costs or benefits affecting individuals who are not directly involved in the production and consumption of goods and services

33
Q

Negative externalities

A

Unwanted social/ or financial costs of production and consumption
-destruction and depletion of natural resources (wood/waterways)

34
Q

Positive externalities

A

Benefits enjoyed by third parties that result from production and consumption of others
Example: Bicycle industry
- Reduces carbon emissions
-Increase health benefits

35
Q

Market failures

A

when markets alone fail to meet the needs of society (over or under supply)
Price mechanism fails to allocate scarse resources

36
Q

Economic systems

A

Aim to address the key economic problems.
Ways in which society’s allocate limited resources with the unlimited demands

37
Q

Economic systems

A

Aim to address the key economic problems.
Ways in which society’s allocate limited resources with the unlimited demands

38
Q

Economic resources

A

Inputs required by the producer

39
Q

How do you measure material wellbeing

A

Collecting data and indicators of economic performance:
economic growth
unemployment
inflation
sustainability

40
Q

How do economics improve material wellbeing

A

It contributes to our material standard of living by allowing us to earn incomes, allowing us to access/purchase goods and services

41
Q

Monetary policies

A

Reserves Bank of Australia (RBA), managing money supply in the economy
- Can increase and decrease interest rate

42
Q

Budgetary policies

A

Government manages taxation and spending
- Can increase and decrease taxes
-Controls government spending

43
Q

Economic growth

A

Measure of change in value of goods and services
Uses GDP

44
Q

Price Stability

A

Sustained increase in price of goods and services

45
Q

Inflation

A

Necessary of 2-3% increase
Measured every quarter (3 months)

46
Q

Economic/Business cycle

A

The growth in GDP overtime
-peak
-recession
-recovery of economy

47
Q

Full employment

A

All people willing to have a job, over 15 years old.
Everyone above 15 in Aus wroks

48
Q

Economic activity

A

Value of production, employment, income and money invested into a buiness

49
Q

Economic Policy

A

Policies that meet economic objectives

Commerce (2 decks)

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