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Commerce > Topic 1 Revision > Flashcards

Topic 1 Revision Flashcards

1
Q

What is transaction

A

the exchange of money for something in return

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2
Q

What are the two different types of transaction

A

Indirect and Direct

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3
Q

what is economics

A

the social study of how people and society choose to use their limited resources to satisfy their needs and unlimited wants

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4
Q

what is an economy

A

a system for producing and distributing goods and services to fulfill people’s wants.

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5
Q

when does an economy exist?

A

an economy exists in a place of region around where 1. production of goods and services take places, 2. expenditure on those goods and services takes place, 3. income is made from the selling of those goods and services

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6
Q

what is opportunity cost

A

the loss of other alternatives when one alternative is chosen. it is the value of the best alternative given up. there can only be ONE oppourtunity cost

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7
Q

what are trade offs

A

they are what you give up every time you make a choice (usually a list of options you gave up)

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8
Q

what is scarcity

A

the idea that there is a limited amount of resources to meet unlimited wants (the economic problem)

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9
Q

what is inflation

A

a general increased in prices and fall in the purchasing value of money

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10
Q

what is recession

A

a period of temporary economic decline during which trade and industrial activity are reduced. generally identified by a fall in GDP in two successive quarters

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11
Q

what is microeconomics

A

how individuals, businesses, and households make decisions - small scale

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12
Q

what is macroeconomics

A

how an entire economy functions (the sum total of all the individual households, individuals and businesses use their resources) - large scale

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13
Q

what are costs

A

what you spend when you make a choice (eg. time, money, resources)

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14
Q

what are benefits

A

what you gain when you make a choice (eg. time, money, resources)

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15
Q

what is cost-benefit analysis

A

listing out the costs and benefits of a decision and then making a choice

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16
Q

what is margin

A

the outside edge or border

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17
Q

what is marginal benefit

A

what you gain by adding one unit of something (eg. time)

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18
Q

what is marginal cost

A

what you lose by adding one unit of something

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19
Q

what is incentive

A

something that motivates a person to act a certain way

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20
Q

what are needs

A

essential goods and services that humans need in order to achieve a basic standard of living.

21
Q

what are collective wants

A

to satisfy the needs of society as a whole (eg. libraries and roads)

22
Q

what are wants

A

they provide us with a level of satisfaction and help support the lifestyle of standard of living that we aspire to.

23
Q

what are individual wants

A

to satisfy personal desires of individuals

24
Q

what are complementary wants

A

a good or service that is related to the use of an associated good or service

25
Q

what are goods

A

physical items of value that are traded (eg. cars, milk, iphones)

26
Q

what are services

A

non-physical items of value that are traded (eg. education, haircuts, healthcare)

27
Q

what is the production possibility curve

A

a tool used by economists to demonstrate how opportunity costs arise when individuals or the community make choices. it is often used to illustrate the concept of opportunity cost.

28
Q

what are factors of production

A

used to produce goods or service that satisfy needs and wants. the 4 economic resources are: land, labour, capital, and enterprise

29
Q

what are land resources

A

resources that occur in nature that can be utilised in the production process to generate more elaborate products or consumed in their raw form

30
Q

what are labour resources

A

mental and physical effort exerted by humans in the production process

31
Q

what are captial resources

A

refers to those resources that have been made by combining labour and natural resources to create a more sophisticated input in the production process (eg. machinery)

32
Q

what are enterprise resources

A

the skills of those individuals who combine our resources to produce goods and services

33
Q

what are consumer goods

A

items produced for the immediate satisfaction of individual and community needs and wants

34
Q

what is a recurring want

A

wants that are never satisfied and keep recurring

35
Q

what is externality

A

a situation whereby society, not just the individual consumer of the good or service pays a cost or receives a benefit for the consumption and/or production of the good or service

36
Q

what is a trade-off

A

an alternative that we can sacrifice when we make a decision

37
Q

what is marginal utility

A

satisfaction or usefulness obtained from acquiring one more unity of a product (same as marginal benefit)

38
Q

what is trade

A

the voluntary exchange of goods and services between two or more parties

39
Q

what is a market

A

an arrangement that allows buyers and sellers to exchange goods or services

40
Q

what is specialisation

A

occurs when people and businesses concentrate on what they are best at

41
Q

what is division of labour

A

division of work into a number of separate tasks to be performed by different workers

42
Q

what is the production process

A

the activities, equipment, and resources needed to manufacture a product

43
Q

what is a command economy

A

an economic system in which the government makes all the economic decisions

44
Q

what is a market economy

A

an economic system in which decisions on production and consumption of goods and services are based on voluntary exchange in markets

45
Q

what is a mixed economy

A

an economy in which private enterprise exists in combination with a certain amount of government regulation and promotion

46
Q

what is sunk cost

A

a cost that has already been incurred and that cannot be changed by any decision made now or in the future

47
Q

what is input

A

scarce resources that go into making a product

48
Q

what is an output

A

the goods and services that are created using imputs

49
Q

productivity = ?

A

output/input

Commerce (3 decks)

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