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Social Science 2014 > Economics Revision > Flashcards

Economics Revision Flashcards

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1
Q

Define Economic Problem

A

The Economic problem is when there are limited resources to satisfy the economy’s growing wants.

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2
Q

Define Needs

A

Something that is essential and very necessary for survival, or something that you need.

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3
Q

Define Wants

A

Something that is not essential for survival or something that is for your personal wants. Something you can easily go without.

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4
Q

Define Complimentary Goods

Give some examples…

A

Complimentary goods:
Something that go hand in hand with each other and one would not work without the other
For Example: A computer and a charger, a car and fuel, computer and mouse etc. etc.

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5
Q

Define Substitute Goods

Give some examples…

A 
Substitute goods:
Something that can be easily replaced by something else, or something similar
For Example:
Coke and Pepsi
Twisties and Chips
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6
Q

Define the Primary Sector of the Economy

A

The primary sector of the economy extracts or harvests products from the earth. The primary sector includes the production of raw material and basic foods.

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7
Q

Define the Secondary Sector of the Economy

A

The secondary sector of the economy manufactures finished goods. All of manufacturing, processing, and construction lies within the secondary sector.

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8
Q

Define the Tertiary Sector of the Economy

A

The tertiary sector of the economy is the service industry. This sector provides services to the general population and to businesses. Activities associated with this sector include retail and wholesale sales

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9
Q

Define the Quaternary Sector of the Economy

A

The quaternary sector of the economy consists of intellectual activities that usually require more qualifications and development and have more of a risk factor in association with other people. Activities associated with this sector include government, culture, libraries, scientific research, education, and information technology.

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10
Q

Define Economics

A

Economics is ‘a science that deals with the use of limited or scarce resources for the purpose of fulfilling society’s needs and wants.

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11
Q

Define Opportunity Cost

A

Opportunity Cost is:

1. The sacrifice of some of one product to produce more of the other.
2. What you give up to produce more of another product.
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12
Q

Define Profit

A

Profit is the money made by a business or person when the costs of doing business are taken out.

Every business needs to maximise profit in order to keep the business running. Decrease costs to increase profit amounts.

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13
Q

Define wage

A

Wage is a payment received on an hourly basis or hourly rate

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14
Q

Define Salary

A

Salary:
Monthly or Yearly Payments
Money paid to an employee on a yearly basis.
Benefits: know your pay guarantee

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15
Q

Describe the Small Circular Flow of Income

Four points about this…

A

The Small Circular Flow of Income is:

  • People giving human resources/labour to factories/firms
  • Factories/firms in exchange they pay these labourers
  • The labourers’ incomes are spent on final goods and services.
  • Final goods and services are sold to the community of workers.
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16
Q

What are the four factors of production?

A

Land, Labour, Capital and Enterprise

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17
Q

What is Land?

Give examples.

A

The natural resources that are used to produce the final good
Examples:
Iron Ore
Trees

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18
Q

What is labour?

Give examples.

A 
The workers or labourers that work in several ways, to produce the final good.
Examples:
Tree Cutter
Truck Driver
Miner
Sawmill Worker
Assemblers
Shopkeeper
Welder
etc. etc. etc.
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19
Q

What is capital?

A

The tools and machinery used by the labourers to produce the final good.

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20
Q

What is Enterprise?

Give some examples

A

The entrepreneur or CEO of the company, or whoever owns or came up with the idea for that company.
Examples:
Yamaha= Torakusu Yamaha
Apple Inc.= Steve Jobs

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21
Q

Define goods

Give some examples

A

Goods - Physical objects which you can see, touch or pick up Eg; computer, book, chair
Something that is produced and sold in the economy

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22
Q

Define services

Give some examples

A

Services - Non-physical item that can be purchased Eg: getting a haircut, posting a letter

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23
Q

Define free goods

Give some examples

A

Free Goods - goods are free because they are not scarce Eg: air, sunshine

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24
Q

Define Consumer Goods

Give some examples

A

Consumer Goods- goods which households buy to directly satisfy individual needs and wants
Eg. Food

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25
Q

Define Consumer durable goods

Give some examples

A

Consumer durable goods are goods which last a long time

Eg. Car, TV

26
Q

Define consumer non-durable goods

Give some examples

A

goods which are consumed quickly

Eg. Food, fuel

27
Q

Define capital/producer goods

Give some examples

A

goods used to make other goods

Eg. machinery, tools used in the production process.

28
Q

Complementary Goods are…

A

goods which, at the time of purchase, lead to the purchase of another.
For example:
You buy coffee, you get cake
Buy a car, you need fuel
Buy a computer, you need to buy a charger

29
Q

Substitute Goods are…

A 
purchase of another good in place of a previous one due to price increase.  Something that can be easily replaced by another.
For example: 
- iPhone and Samsung
- Twisties and Cheesels
- Coke and Pepsi
30
Q

Give a substitute and complementary good for butter

A

Margarine and jam

31
Q

Give a substitute and complementary good for a newspaper

A

Magazine and glasses or coffee

32
Q

Give a substitute and complementary good for a car

A

Bike and Helmet

33
Q

What are the 8 types of earned income?

A 
CRISPFWD
Commission
Rent
Interest
Salary
Profit
Fees
Wage
Dividend
34
Q

What type of earned income does an architect receive?

A

Salary

35
Q

What type of earned income does a teacher receive?

A

Salary

36
Q

What type of earned income does a Doctor receive?

A

Fees or Salary

37
Q

What type of earned income does a Factory Worker receive?

A

Wage or Salary

38
Q

What type of earned income does a hairdresser receive?

A

Fees

39
Q

What type of earned income does an owner of an office building receive?

A

Rent

40
Q

What type of earned income does a shop assistant receive?

A

Wage

41
Q

What type of earned income does a carpenter receive?

A

Fees

42
Q

What type of earned income does a lawyer receive?

A

Fees or Commission

43
Q

What type of earned income does a builder receive?

A

Wage or Salary

44
Q

What types of earned income does a car salesperson receive?

A

Commission

45
Q

What type of earned income does a banker receive?

A

Salary

46
Q

What is Incorporated Perpetual Succession?

A

When the original owner of the company dies and someone else takes it on.
Or when the company is bigger than the CEO
Eg. Jim’s Mowing Business

47
Q

What is the simple definition for the primary sector of the economy?

A

The Land Resources harvested or extracted

48
Q

What is the simple definition for the secondary sector of the economy?

A

Transformation of the primary products

49
Q

What is the simple definition for the tertiary sector of the economy?

A

Basic Services
Service Industry
Minimal Training/Knowledge/Qualifications

50
Q

What is the simple definition for the quaternary sector of the economy?

A
  • Highly skilled/knowledge based services

- More training and experience required.

51
Q

What are some marketing methods?

A 
Market research
Packaging
Sales promotions
Advertising
Distribution
52
Q

What are the two types of advertising?

A

Informative and Persuasive Advertising

53
Q

What is informative advertising?

A
  • Words
  • Where to buy- costs
  • What it can do-uses
54
Q

What is persuasive advertising?

A
  • Convincing

- Emotional and Visual- More Pictures- fewer words

55
Q

What are individual wants?

A

Wants desired by a person for themselves
Eg. a new bike
Eg. a new car

56
Q

What are collective wants?

A

are wants desired by the whole community and the goods and services to produce these are provided by the government
Eg: footpaths, rubbish disposals and swimming pools

OR in short- wants of the community

57
Q

Define consumers

A

is the person who uses goods and services to satisfy their wants.

58
Q

Define producers

A

Firms/companies making goods and services

59
Q

Describe a SOLE TRADER

Include advantages and disadvantages of a sole trader

A

A sole trader is a company consisting of a single person

Advantages:

  • In control of the management and finance- you get all the money
  • Go with your opinion/decision

Disadvantages:

  • Unlimited Liability- personal assets are at risk
  • Only have your sources- more responsibilities $$
  • The business suffers when you are enable to help$$ sickness
  • No other input and skills
60
Q

Describe a PARTNERSHIP including advantages and disadvantages of a partnership.

A

A company consisting of 2-4 people.

Advantages:

  • Partnership Agreement- less expensive for the individual- equal role in management
  • More opinions and POV

Disadvantages:

  • Has to be lodged with the law
  • Profits are distributed$$
  • Losses are divided- responsibilities
  • Unlimited liability- assets at risk
61
Q

Describe a private company

Include advantages and disadvantages

A

A private company is the company that has between 1-50 and is the most common.

These owners contribute $$$ and buy shares, which are given to them in a mini-salary/dividend

  • Invited owners only
  • Pty. Ltd.
    Proprietary/Private and Limited liability- personal assets are not at risk
  • ONLY INVITED OWNERS CAN BUY/INVEST IN A % SHARE
62
Q

Describe public companies

Include advantages and disadvantages

A

A Public Company

  • listed on stock exchange
  • Can raise $$$ selling to the public
  • Limited Liability- assets not at risk
  • Produce an annual report for current and potential shareholder
  • you get a mini-salary/dividend if you invest
  • ANYONE CAN BUY/INVEST$$$ IN A % SHARE

Social Science 2014 (3 decks)

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