Economics Test Flashcards
Economics
The study of how people choose to use scarce resources.
Four factors of production
Land
Labour
Capital
Enterprise
Equilibrium
When supply and demand are in balance this is market equilibrium.
-> quantity demanded=quantity supplied
If demand is greater than supply there is going to be a shortage of goods
If supply is greater than demand there is going to be oversupply
Scarcity
Unlimited wants or needs for limited goods and services.
Economic good
Are scarce and not enough available to meet our wants.
Free goods
Are not scarce and there is enough available to meet our wants.
Difference between producer and consumer
Producers make goods and services
Consumers buy and use the products
How does scarcity occur
Scarcity occurs when people want more than there is available
To stop us from buying on impulse we
Should create a list and keep to a budget to avoid such mistakes
Types of market structure
Monopolistic- clothing industry Pure or perfect- fruit and vegetables Duopoly- Coles and Woolworths Oligopoly- car manufacturing Monopoly- Australia post
Fraud/Scam
A scheme intended to gain personal and financial information
Consumer
Someone who buys and uses goods and services
Producer
Someone who provides goods and services
Good
Physical things that you can see and touch
Service
Actions that other people might perform for us and are not physical items
Market
A place where people exchange goods and services
Law of demand
If the price increases the demand decreases and vice versa
-> demand rises as price falls
Law of supply
As the price increases the quantity also increase
-> the higher the price the higher the quantity supplied
Consumer demand
Price Quality Brand In trend Peer pressure Advertising
Need
Something we can’t do without
E.G. Food, water, shelter
Want
Not absolutely necessary
Demand
Willing and able to buy to buy at a particular price
Demand schedule
A table of the quantity demanded of a good at different price levels
- > Used to make a demand curve (demand curve always goes down)
- > TALL: Title, Axis, Labels, Line
Supply
Is the quantity of goods and services a producer is willing to make
Circular flow of income
Government Household Financial Overseas Business/producer
Australian consumer law
Protects the rights of both buyers and sellers
Acceptable quality
Suitable for purpose
Safe to use
Last a reasonable time
Of acceptable appearance (fit description)
{if not we have the right to the 3r’s}
3R’s
Replacement
Repair
Refund
Product Recall
Retrieving goods from consumers with compensation
ACCC
Australian Competition and Consumer Comission
-> role is to protect consumers from unsafe products and inform them of potential risks and regulate industry
Compensation
This is awarded to make up for loss or injury
Warranty
Warranty is when a company promises that they will replace, repair or refund a product if faulty or broken.
Monopoly
When there is only one business selling a particular product
-> Australia post
