Week 1 - Economics/Scarcity

Question 1

Economics Definition

Answer 1

• social science that studies the production, distribution, and consumption of goods and services
• how limited resources are used to produce g/s which, when distributed fairly between individuals, can help satisfy people’s wants/needs

Question 2

Microeconomics

Answer 2

• involves looking at the operation of the smaller parts that make up the wider Australian economy
• focuses on a single firm, industry, sector or market

Question 3

Macroeconomics

Answer 3

• looks at the broader picture combining all markets and industries and the overall state of the country’s economy
• concentrates on areas such as national spending, output, income , employment and overall living standards

Question 4

Relative Scarcity

Answer 4

• describes the imbalance that exists between our unlimited demands relative to the limited or finite resources that are available to satisfy these demands
• the price of one good/service is relative to another –> diamonds are relatively scarcer than air, meaning t hey have a higher price while air is usually free and has no price