Economics

Question 1

What is economics? (3 points)

Answer 1

The study of economising

The relationship between ends and scarce means

Unlimited wants vs limited resources

Question 2

In gratton and Taylor’s circular flow of income model, four factors flow between households and firms, what are they?

Answer 2

Factor services, income, expenditure, goods and services

Question 3

Influences on demand

Answer 3

Price of related product or service (complementary/substitute)
Consumers income
Price of other goods
Individual preference
Time
Availability of transport
Seasonal factors

Question 4

Influences on supply?

Answer 4

Objectives of the producer
Production costs
Technology
Weather
Availability of credit
Expectations

Question 5

Price elasticity equation of supply?

Answer 5

% change in quantity supplied / % change in price.

Remember negatives

Question 6

Leakages and injections into Gratton and Taylor’s circular flow of income model?

Answer 6

Investment (into firms)
Exports (into firms)
government expenditure (into firms)

Tax (on income)
Savings (from households)
Imports (from expenditure)

Question 7

Sports contribution to the economy? (figures, 2010)

Answer 7

£20.3 bn contribution to economy of England (1.9% of total

Over 400,000 jobs, 2.3% of employment

Estimated economic value of sport related volunteering is £2.7 billion

Annual value of health benefits from people taking part in sport is est £11.2 billion