Economics + Business Flashcards
The Economic Problem
The basic economic problem is that an economy has finite (limited/scarce) resources, but that humans have unlimited wants and needs
What are 3 Questions that arise from ‘The Economic Problem’
- What to produce?
- How to produce it?
- For whom to produce it?
Macroeconomics
A branch of economics that focuses on economy wide (large-scale) issues such as economic performance, growth, inflation, etc.
Microeconomics
A branch of economics that focuses on individuals and small-scale business issues such as making decisions especially regarding the allocation of resources and behaviour of costumers
Recession
An economic recession is where economic growth falls for two or more quarter (that is, six or more months) in a row.
Australia has had four recessions since 1960:
1961, 1974-1975, 1982-83 and 1990-91
What are the 5 Key Concepts of Economics and Business?
The 5 Key Concepts of Economics and Business are:
- Allocation
- Economic Performance
- Interdependence
- Scarcity
- Specialisation
Allocation
A key concept in economics and business: the way scarce resources are distributed among producers, and how scarce goods and services are divided among customers
Balanced Budget
When government revenue is exactly equal to expenditure
Better Life Index
The OECD Better Life Index measures wellbeing across countries, based on 11 topics that cover areas of material living conditions and quality of life
Business
An organisation that engages in commercial activities, often by producing goods or selling goods or selling goods or services
Business Processes
A series of tasks or actions that are undertaken by a business to produce its product
Capital Resources
Inputs from man-made goods, such as machines or computers, that are used to produce further goods and services
Carbon Tax
Polluters being charged a tax to pay per tonne of carbon released into the atmosphere
Cause-and-Effect Relationship
Where one event or action is the result of the other
Circular Flow of Income
The concept that producers rely on their customers to buy their goods or services so that they can continue to produce them, while consumers’ ability to earn an income, and therefor purchase goods and services, relies on producers
Consumer
An individual who purchases goods and services for personal use
Consumer Price Index (CPI)
A measurement of retail price changes of a constant basket of goods and services, representative of what households in Australia spend
Deficit Budget
When government revenue is less than government expenditure
Depreciation
An asset such as a computer reducing in value over time due to wear and tear
Depression
When economic activity is in decline over the long term
Deregulation
Reducing or eliminating government power in an industry to promote better competition in that industry
Discrimination
Treating people differently or unfairly because of factors such as sex, race, religion, etc
Domestic
Within a country
Earn
To abstain money in return for labour or services
Economic Growth
An increase in the amount of goods and services produced per person within a specific period of time
Economic Performance
A Key Concept in Economics and Business: how well an economy is performing, measured by whether it is achieving its economic objectives
Economics
The study of how people produce, consume and share wealth
Economic System
The system that coordinates he production and distribution of goods and services
Economies of Scale
Producing larger quantities of a good or service that results in reduced unit costs of production
Economy
A system that involves the production, distribution, trade and consumption of goods and services by individuals, businesses, organisations or governments
Final goods
Goods that are ready to be consumed now rather than being used to make other goods
Expenditure
The amount of money spent by a person or government
Export
To send goods to other countries to be sold
Fiscal Policy
The government’s management of the federal budget, adjusting expenditure and tax rates to influence the performance of the economy
