Economics Flashcards
Relative Scarcity Definition
Definition= describes a situation where a resource is limited in supply, compared to demand.
Resources Definitions and Examples
Definition= are the materials used in production of goods and services
Examples are metals ( capital) , electricity ( land), and skilled workers( labor).
Want Definition and Examples
Definition=A want is a good or service that improves the quality of life.
Examples: technology, luxuries
Need Definition and Examples
Definition= A need is a good or service that is deemed necessary for survival.
Examples: Food, water , shelter
The Basic Economic Problem
The Basic economic problem is Relative Scarcity
Opportunity Cost
Opportunity cost is the value of the next best option foregone when a choice is made
The fundamental economic questions and how they are answered.
1) What to produce?
- demand
2) How to produce it?
- efficient process by producers
3) For whom to produce?
-price= determines whom goods or services will be produced for.
Factors that lead to a change in supply and shift in the supply curve.
1) Availability of resources
2) Cost of production
Law of Supply
-when there is an increase in price = is an increase in the quantity supplied
-when there is a decrease in price = decrease in quantity supplied
Supply Definition
Definition= The ability and willingness of suppliers to supply a particular good or service.
*suppliers are motivated by profit
Factors that lead to a change in demand and shift in the demand curve
1) change in level income
2) Fashion/Taste/Preference
3)Advertising/ Marketing
Concept of the ‘Law of Demand’
-when there is an increase in price = decrease in quantity FOR DEMAND
-when there is a decrease in price = increase in quantity FOR DEMAND
these are the consumers
Definition of Demand
The ability and willingness of consumers to purchase a particular good or service
Unemployment rate.
when someone over 15 w/o work or less than an hour per week is actively looking for work
- this is considered to stay at 4-5%
- unemployment rate= (unemployment/ emp + unemp ) x100
GDP definition
Gross Domestic Production is the final market value of all goods and services produced in an economy
Microeconomics
The study of individual parts of the economy that interreact to make up the whole economy.
Macroeconomics
The study of the economy as a whole. We explore Aus as a whole.
3 Main Goals
-full employment
- low inflation
- strong and sustainable
Definition of Inflation
Inflation is a sustained increase in the general or average price level over time.
