economics and business

Question 1

what is economics

Answer 1

study of how resources are allocated to meet needs and wants of society, based on scarcity

Question 2

define economy

Answer 2

all households, businesses and governments in a particular area

Question 3

consumers

Answer 3

buy goods and services, earn, pay taxes, save

Question 4

producers

Answer 4

produce goods and services, pay wages, borrow money, importing and exporting goods

Question 5

goverment

Answer 5

charges taxes, pay wages, provide benefits, payments and services

Question 6

financial institutions

Answer 6

hold saving, lend money, aim for profit, pay taxes
- funnel in money between other participants e.g investing

Question 7

microeconomics

Answer 7

behaviour of INDIVIDUALS
concerns things affecting cost/prices/affordability of a firm e.g woolies

Question 8

macroeconomics

Answer 8

what affects WHOLE ECOMONY, things that happens to Aus, e.g gdp inflation, unemployment

Question 9

GDP

Answer 9

total value of goods and service produced within a set time frame

Question 10

GDP per capita

Answer 10

GDP divided by the total population

Question 11

material living standards

Answer 11

refers to properties owned, clothing, cars and employment

Question 12

non material livng standards

Answer 12

literacy, health care, air quality, low crime rates, literacy, environment

Question 13

how is living standard measured

Answer 13

human development index is used as a scale where ideal is 1.00. measures gdp, life expectancy and education

Question 14

four factors of production

Answer 14

land, capital, labour, entrepreneurship

Question 15

LAND

Answer 15

all natural resources e.g soil for agriculture, mineral deposits, waterways, oil

Question 16

LABOUR

Answer 16

physical and intellectual input that involves a person, different types of production have different balances e.g mechanic vs retail worker

Question 17

CAPITAL

Answer 17

factories and machines, ICT basically manufactured resources. increase productive capacity

Question 18

ENTREPRENEURSHIP

Answer 18

founds and runs a small business with intention of gaining profit through this risk

Question 19

importance of economic growth

Answer 19

more goods and services are produced which leads to more employment, so ppl can then spend wages and improve living standard

Question 20

on a yearly basis, how much should economy grow?

Answer 20

should exceed 2% annually

Question 21

scarcity

Answer 21

unlimited wants and needs with limited resources

Question 22

what is planned obsolescence

Answer 22

when manufacturers purposely make things that wear out easily and cannot be repaid, forcing the consumer to keep purchasing more - contribution to relative scarcity

Question 23

opportunity cost

Answer 23

the next best alternative for when you decide to buy something

Question 24

what is marginal thinking

Answer 24

when you analyse the marginal benefits in comparison to the marginal cost for the next decision. the optimum is when they are equal.

Question 25

law of diminishing marginal utility

Answer 25

states that each additional/marginal unit of a good or service that is consumed generates less utility/satisfaction than the previous.

Question 26

what is marginal utility

Answer 26

the extra satisfaction gained from consuming additional quantities of a good or service

Question 27

what does diminishing marginal utility explain?

Answer 27

explains why consumers only purchase a certain amond of different goods and services e.g if i eat migoreng every day for 4 days, i'm less likely to have it on the 5th because my benefit has gone down.

Question 28

limitations of gdp

Answer 28

does not measure quality of life and non material living standards. does not consider how goods/service/incomes are distributed

Question 29

costs of economic growth

Answer 29

growth too fast leads to inflation, can lead to advances in technology and investments- replacing jobs increase in debt levels- future pressures of repayments

Question 30

examples of when material and non material living standards are in conflict

Answer 30

pollution vs production employment vs family time

Question 31

supply

Answer 31

quantity of goods and serveces provided by the producer at a particular price price of product can affect supply

Question 32

define standard of living

Answer 32

degree of wealth and material comfort available to a person or community.

Question 33

what is the equilibrium

Answer 33

the price at where the consumer demand equals the supply of goods

Question 34

surplus

Answer 34

too much supply left over results in reduced price

Question 35

shortage

Answer 35

excess demand reults in increased prices

Question 36

what is a market

Answer 36

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

Question 37

demand

Answer 37

refers to the quantity of a good or service that consumers are willing and able to purchase at various prices during a specific time period.

Question 38

law of demand

Answer 38

The law of demand shows the relationship between price movements and consumer demand for a product. The law of demand states that as price rises, demand falls and as price falls, demand rises.

Question 39

non price factors impacting demand

Answer 39

price of complementary products e.g milk and coffee seasons, fashion and trends,

Question 39

law of supply

Answer 39

Assuming costs remain the same, the higher the price, the greater the profit on each item, meaning that the producer is willing to supply higher quantities the higher the price.

Question 40

shifts in demand

Answer 40

increase in income, popularity of the product

Question 40

shifts in supply

Answer 40

weather, government providing more assistance to stores during covid.

Question 41

non environmental factors affecting supply

Answer 41

environment e.g natural disasters, competitors, price of inputs and production costs, advances in technology

Question 42

what are the three economic questions

Answer 42

what goods and services should be produced? how should they be produced? who consumes these?

Question 43

advantages of a free market

Answer 43

consumer satisfaction is higher, easily react to day to day changes, individual freedom for consumers and firms, lots of production

Question 44

disadvantages of free market

Answer 44

risks and uncertainty, struggle to provide services, can fail if consumers aren't knowledgeable.

Question 45

market economy

Answer 45

system where the laws of supply and demand direct the production of goods and services.

Question 46

consumer sovereignty

Answer 46

assumption that individuals act in their self interest, businesses are motivated by money and profit.

Question 47

characteristics of a planned economy

Answer 47

resources owned by gov, individuals have little influence over what is produced, no competition, governemnt sets prices, aims to set equity,

Question 47

planned economy

Answer 47

when the government plans what and how the things should be produced, and for whom.

Question 48

socialism

Answer 48

The government controls critical industries such as education, healthcare, public transport, but individuals can run non critical businesses such as retail stores, cafes, tourism etc.

Question 49

communism

Answer 49

he government owns all of the factors of production (land, labour, capital) and decide how to use those resources.

Question 50

mixed economy

Answer 50

A mixed economy is an economy organized with some free market elements and some socialist elements, which lies on a continuum somewhere between pure capitalism and pure socialism.

Question 51

free market aspects of aus

Answer 51

u can choose what to consume, private property rights, can run ur own business, competition

Question 51

planned aspects of aus

Answer 51

gov regulates wages, implemments taxes, advertising laws, gov provides public goods and services e.g schools and healthcare