economics

Question 1

define economics

Answer 1

understanding how decisions are made and what the impacts of those decisions are

Question 2

what is a good

Answer 2

tangible items that can be touched and purchased

Question 3

what is a service

Answer 3

intangible acts or performances

Question 4

what is demand

Answer 4

the amount of goods and/or services consumers will purchase at a particular price

Question 5

what is supply

Answer 5

the quantity of a good and/or service businesses are willing to provide in a market

Question 6

define relative scarcity

Answer 6

the fundamental economic problem of limited resources being available to satisfy unlimited wants.

Question 7

what are some factors of production?

Answer 7

Capital, labour and natural resources

Question 8

what are the three types of economic systems that countries can choose to adopt?

Answer 8

Market System
Command/Planned System
Mixed-market System

Question 9

what is a market?

Answer 9

any situation where buyers are in contact with potential sellers and there is a means of exchange.

Question 10

what is a means of exchange

Answer 10

a way of paying for goods and services that are traded.

Question 11

what are the 3 Basic Economic Questions

Answer 11

What to produce?
How to produce?
For whom to produce?

Question 12

what is the price mechanism?

Answer 12

the system where the forces of demand and supply determine the prices of goods and services.

Question 13

what does the law of demand state?

Answer 13

As the price of a good increases then the demand falls
and as the price of a good falls the demand increases.

Question 14

what factors influence demand?

Answer 14

Level of disposable income
Trends
Price & availability of substitutes
Price & availability
Consumer confidence
Advertising

Question 15

what is the level of diposable income?

Answer 15

income available for spending after the deduction of taxes and other obligations

Question 16

describe subsitude goods

Answer 16

a good that can be used instead of another – coke/pepsi

Question 17

describe complimentary goods

Answer 17

goods consumed at the same time – bread/butter

Question 18

what is consumer confidence

Answer 18

state of economy

Question 19

what does the law of supply state?

Answer 19

As the price of a good increases then the supply will rise
and as the price of a good falls the supply decreases.

Question 20

what factors influence supply?

Answer 20

Weather
Production costs
Competition
Technology

Question 21

what is an economic system?

Answer 21

a system of production, resource allocation and distribution of goods and services within a society

Question 22

what is a planned economy also referred to as?

Answer 22

command economy

Question 23

what is a planned economy?

Answer 23

an economic system where a government body (rather than people) makes economic decisions regarding the production and distribution of goods

Question 24

what are the pros of having a planned economy?

Answer 24

equal distribution of wealth
reduced inequality
low level of unemployment
maximised social welfare

Question 25

what are the cons of having a planned economy?

Answer 25

lack of competition and innovation
no incentives to work hard
no private enterprises
high levels of government control
lack of freedom

Question 26

what countries have a planned economy?

Answer 26

Soviet Union (Russia), North Korea ,China and Cuba etc.

Question 27

What is a mixed market economy?

Answer 27

An economic system that acceppts both private businesses and nationalized government services

Question 28

How does a planned economy approach the 3 economic questions?

Answer 28

The government determines them

Question 29

How does a mixed market economy approach the 3 economic questions?

Answer 29

They are based on the wants of the consumers, the choices of the producers, and who can afford the goods

Question 30

what are the pros oof using a mixed market economy?

Answer 30

increased efficiency and productivity
welfare protections for poorer citezens
government can set strategic priorites through economic policy

Question 31

what does a mixed market economy promote?

Answer 31

A form of regulation to protect the public, the environment or the interests of a state

Question 32

what country used a mixed market economy?

Answer 32

Australia!

Question 33

what are the cons of using a mixed market economy?

Answer 33

does not avoid government intervention
higher taxes to pay for welfare state policies

Question 34

What is a free market economy?

Answer 34

A system where the what, how and whom of goods and services are determined by supply and demand and expressed by sellers and buyers, with little to no government intervention

Question 35

Why is profit so importaanty in a free market economy?

Answer 35

Profit drives all businesses and activities and forces businesses to generate as efficiently as possible to avoid losing revenue

Question 36

What are some examples of (almost) free market economies?

Answer 36

Singapore (89.7%)
New Zealand (83.7%)
Switzerland (83.5%)

Question 37

What are some pros of using the freemarket economy?

Answer 37

Increaased efficiency
Productivity
Innovation

Question 38

What are some cons of using the free market economy?

Answer 38

Monopoly-like system
No government intervention
No regulation, can lead to poor working conditions and unemployment