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G9 IH > how to decide what to produce > Flashcards

how to decide what to produce Flashcards

1
Q

Factors of Production

A

Land
Labour
Capital - money
Entrepruenship - skills required to start a businesss

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2
Q

Demand

A

Amount of product that consumers are willing and are able to purchase

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3
Q

Scarcity

A

Lack of resources
Demand is greater the resources avaliable

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4
Q

Resource allocation is done based on

A

level of scarcity

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5
Q

What is a market?

A

A place where consumers and producers meet to exchange goods and services

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6
Q

A market functions on

A

demand and supply

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7
Q

demand and supply determine the

A

price of the product

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8
Q

what is cogs

A

cost of goods sold - determines the price alongside demand and supply

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9
Q

free will

A

Consumers decide the product is worth more than its price hence they buy it

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10
Q

Law of demand

A

The lower the price of the product the more the demand, downwards on graph

based on buyers perspectiv

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11
Q

Law of supply

A

The higher the price the higher the quantity supplied, upwards on graph

based on seller’s perspective

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12
Q

Equilibrium Market Price

A

point of the graph of law of demand and supply where both lines intersect, it is the ideal selling price for a product with max supply and max profit

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13
Q

Surplus

A

When supply is more than demand because of the price

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14
Q

Shortage

A

When demand is more than supply because of the price

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15
Q

If the price is more than equilibrium,

A

Surplus

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16
Q

If the Price is less than equilibrium

A

Shortage

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17
Q

Households give Businesses

A

Labour and captial

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18
Q

Businesses give Households

A

goods and services

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19
Q

What can change the demand of a product without touching its price

A

Quality
Change in situation
Adv, Campaign, Marketing
Population Demographic
The income situation of common people
Belief, Tradition and Festival
Trend, Style and Influence

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20
Q

what can change the supply of a product without touching its price

A

Raw Material/Change in COP (cost of production)
Technology
Natural Condition/ Weather
Taxes/Subsidies

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21
Q

Externality

A

a cost or benefit that affects a third party who is not directly involved in the activity and not directly involved in a transaction

22
Q

example of negative externalities

A

a factory dumping smoke into the air. The factory avoids the cost of cleaner production, but residents suffer from respiratory problems. This creates a burden not reflected in the market price

23
Q

example of positive externalities

A

Vaccinations. While you get protection from getting sick, those around you also benefit from reduced risk of infection. This positive impact isn’t captured by the price of an individual vaccination as it impacts lots of people

24
Q

Parts of an economy

A

People (households)
Businesses
Government
Banks

25
Q

3 main questions to ask while production of something?

A
  • What to produce?
  • How to produce?
  • Who will produce?
26
Q

What is an economy

A

Interconnected web between producers and consumers

27
Q

Households decide

A

What to buy from and where to buy from

28
Q

Businesses

A

What to seel and at what price

29
Q

Government

A

Gian profit from tax given by business and households. They use this tax in welfare programs

30
Q

Banks

A

Deal with monetary services

31
Q

Price ceilings

A

Gov sets a maximum price for a good/service in a specific market

32
Q

Price Floors

A

Gov sets a minimum price for a good/service in a specific market

33
Q

Types of economies

A
  1. Traditional
  2. Command
  3. Market
  4. Mixed
34
Q

Tradtional Economy

A

Households are responsible for prodcution of product
Only produce for family and you have full control over allocation of resoruces and prodcution
Eg - Hunter Gatherer Ancestor

35
Q

Command Economy

A

Productionis determnes by the government
It dictates allocation of resources
Eg - Slavery and Feuadalism

36
Q

Why would a command economy not work?

A

Centralised control
Lack of flexibility
Hinder innovation and efficiency
Gets boring (stagnant) over time

37
Q

Market economy

A

Based on consumer and producer’s voice and choice
Price and allocation of resources is determined by supplly and demand

38
Q

Mixed economy

A

Mix of command and market economy
Price is still determine by supply and demand system but with little government intervention for regulation and stability of the economy
Most common type of economy found in the world today

39
Q

why and how do governments intervene in market

A

Governments intervene in markets to address inefficiencies, promote social well-being, and provide public goods. They use regulations, taxes, subsidies, and spending to achieve these goals

40
Q

subsidies

A

a financial benefit or support given to individuals or institutions, usually by the government

41
Q

ROLE OF BANKS IN markets

A

Act as middleman for depositers and borrowers

Provides financial services for economic stability

42
Q

economic development

A

Focuses on a country’s social and welfare position and QOL

43
Q

Injection

A

Investetments (done by banks), gov expenditure, exports

44
Q

Recession

A

Period of economic decline characterised by a decrease in GDP, icone, employment, trade because of drop in consumer demand, decrease levels of investments, financial crisis

45
Q

inflation

A

sustained increase in general price of level or goods and services over time caused due to rising demands for goods exceeding supply

46
Q

economic growth

A

focuses on a country’s GDP and it is output driven

47
Q

development indicators

A

GDP per capita
Literery rate
Poverty rate
Infant mortality rate
Emotional well being and safety
HDI

48
Q

Income

A

The money you earn over a specific period (e.g., monthly salary, yearly wages). It’s a flow of money

49
Q
A
50
Q

POVERTY CYCLE

A

Child born into a poor famiky
Disadvantage in terms of opportunities and education
Struggles to get a job and escape poverty
Gives birth to new child
Repeats

G9 IH (4 decks)

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