Year 10 Economics

Question 1

Define Economics

Answer 1

Economics is how humans satisfy there needs and wants

Question 2

Define Macro economics

Answer 2

The economics of countries, continents, etc

Question 3

Define Production Possibility Frontier

Answer 3

The more you produce of one thing, the less you have of another

Question 4

Define Opportunity Cost

Answer 4

The true cost of things. It is the goods and services forego when we decide what to consume (what we give up, to get something else)

Question 5

Define Micro Economics

Answer 5

The economics of households and small businesses.

Question 6

Define Demand

Answer 6

The amount of goods or service that the consumer is willing to be able to purchase at any given price

Question 7

Define Supply

Answer 7

The amount of goods or services that a firm is willing to supply at any given price

Question 8

Define Elastics

Answer 8

How consumers respond to a change in price

Question 9

Define Low Elasticity

Answer 9

Demand will not change much with a price change

Question 10

Define High Elasticity

Answer 10

Demand will change a lot with a small price change

Question 11

What’s The Economic Problem?

Answer 11

Our wants are unlimited but our resources are limited. Therefore we must make decisions about what we will have and what we will need to forego (give up)

Question 12

Name the 4 factors of production and give examples

Answer 12

Land - Water, minerals, forests
Capital - Goods made to produce other goods. Tools, roads, factories, ports.
Labour - Physical labour, intellectual labour, skills, knowledge
Entrepreneurship - People that put all factors of production together to make goods and services.

Question 13

What are the types of economy?

Answer 13

1. Free Market
2. Command economy
3. Mixed economy

Question 14

What is the free market economy?

Answer 14

• One of the 3 types of economy
• The government has a small role in managing this economy, little interference from government.
• No competitions

Question 15

What is the command economy?

Answer 15

• usually occurs in communist states
• the government decides what is going to be produced
• there is no competitions as only government factories produce everything

Question 16

What is the mixed economy?

Answer 16

• there is competition, and private ownership
• there is also government regulation of the economy
• provides welfare (unemployment benefits, pensions, health care, ect)

Question 17

Define Law of Demand?

Answer 17

The lower the price of a good or service, the higher the quantity that the consumer will demand

Question 18

Define Law of Supply

Answer 18

Suppliers will produce more of a product when the price is high (an increase in price results in an increase in the quantity supplied)

Question 19

Define Equilibrium

Answer 19

When the quantity supplied is equal to the amount demanded with no surplus or shortage

Question 20

What are some non-price factors that determine demand?

Answer 20

Branding - Fashion and Advertising
Demographics - (Age and gender structure of a population)
Statistical data relating to the population and particular groups within it
Seasonality - Example: Warm clothes are not brought in summer
Income - If income is high people spend more.
Availability of credit - People spend more if credit is cheap (Low interest rates)

Question 21

Define the Income Effect

Answer 21

Changes in price affect the purchasing power of consumer income

Question 22

Define Shortage

Answer 22

Shortage in product, price rises. (excess demand)

Question 23

Define Surplus

Answer 23

Surplus (more) in product, price rises (excess supply)