Year 10 Economics Flashcards
Define Economics
Economics is how humans satisfy there needs and wants
Define Macro economics
The economics of countries, continents, etc
Define Production Possibility Frontier
The more you produce of one thing, the less you have of another
Define Opportunity Cost
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)
Define Micro Economics
The economics of households and small businesses.
Define Demand
The amount of goods or service that the consumer is willing to be able to purchase at any given price
Define Supply
The amount of goods or services that a firm is willing to supply at any given price
Define Elastics
How consumers respond to a change in price
Define Low Elasticity
Demand will not change much with a price change
Define High Elasticity
Demand will change a lot with a small price change
What’s The Economic Problem?
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)
Name the 4 factors of production and give examples
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.
What are the types of economy?
- Free Market
- Command economy
- Mixed economy
What is the free market economy?
- One of the 3 types of economy
- The government has a small role in managing this economy, little interference from government.
- No competitions
What is the command economy?
- usually occurs in communist states
- the government decides what is going to be produced
- there is no competitions as only government factories produce everything
What is the mixed economy?
- there is competition, and private ownership
- there is also government regulation of the economy
- provides welfare (unemployment benefits, pensions, health care, ect)
Define Law of Demand?
The lower the price of a good or service, the higher the quantity that the consumer will demand
Define Law of Supply
Suppliers will produce more of a product when the price is high (an increase in price results in an increase in the quantity supplied)
Define Equilibrium
When the quantity supplied is equal to the amount demanded with no surplus or shortage
What are some non-price factors that determine demand?
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)
Define the Income Effect
Changes in price affect the purchasing power of consumer income
Define Shortage
Shortage in product, price rises. (excess demand)
Define Surplus
Surplus (more) in product, price rises (excess supply)
