Ems Flashcards
What is a mixed economy?
An economic system combining government and individual participation.
What characterizes a centrally planned economy?
An economy primarily controlled by the government.
What defines a free market economy?
An economy where individuals make decisions, exemplified by the USA.
How is mark up percentage calculated?
[Sales - Cost of sales / Cost of sales] x 100 = 25%
What is scarcity?
The challenge of satisfying unlimited wants with limited resources.
What are the characteristics of a mixed economy?
Features of a mixed economy can be observed in South Africa.
What are the characteristics of a mixed economy in South Africa?
The government controls some aspects of the economy, such as basic services; most production decisions are made by individuals.
What is a disadvantage of a centrally planned economy?
There is no entrepreneurship, leading to no innovation, no job creation, and no economic growth. People do not have choices, and everyone is paid the same, which can lead to laziness.
What is globalisation?
The economic activity of different countries that are inter-related and affect one another.
What are some problems with a global economy?
Exploitation of workers and weaker labor rights.
What are some problems with a global economy?
Exploitation of workers; Weaker currencies; Diseases can be spread; Brain drain - Skilled workers leave to other countries.
What type of economy does South Africa have?
Mixed economy.
What are the factors of production?
Land, Labour, Capital, Entrepreneurship.
What is the remuneration for land?
Rent.
What is the remuneration for labour?
Salaries and Wages.
What is remuneration for capital?
Interest
Interest is the payment made for the use of capital.
What is remuneration for entrepreneurship?
Profit
Profit is the financial gain obtained when the revenue from business activities exceeds the expenses.
What role does government play in the circular flow model?
Government collects tax from households and businesses; Government provides public goods and services such as healthcare and education.
Define labour.
Mental and physical effort needed to produce goods and services.
What is the circular flow model?
A visual representation of the flow of goods, services, and money in an economy.
It illustrates how different economic agents interact within the economy.
What are the factors of production?
The resources used to produce goods and services.
These typically include land, labor, capital, and entrepreneurship.
What is the factor market?
The marketplace where factors of production are bought and sold.
This includes the labor market where workers sell their labor to firms.
What does ‘income’ refer to in the context of the circular flow model?
The money received by households from firms in exchange for labor and services.
It is a crucial part of how money circulates in the economy.
Who are considered households in the circular flow model?
Individuals or groups of people living together who consume goods and services.
Households provide labor to firms and receive income in return.
