Economics

Question 1

What is Economics?

Answer 1

the study of how resources are allocated to produce and distribute goods and services in society

Question 2

What are products?

Answer 2

Products are goods (physical, can be touched & stored like ‘iron ore’ or ‘wheat’)

Question 3

What are services?

Answer 3

Services (intangible, often rely on labour effort like ‘education’ and ‘medical’ to deliver it)

Question 4

What products (goods & services) does Australia make and trade (export overseas)?

Answer 4

1. Iron Ores and other ores
2. Gold
3. Lead and Diamonds

Question 5

Why do other countries (economies) produce different goods & services in Australia? Examples?

Answer 5

• seasonal round fruit and vegetables
• All year round food that AUstraklia doesn’t produce eg, coffee.

Question 6

What are the 4 factors of production?

Answer 6

Capital, entrepreneurship, Labour, Land

Question 7

What is Capital?

Answer 7

The equipment and machinery used to make and package the product and the buildings where the production takes place. Eg, ovens, baking dish, racks and bakery.

Question 8

What is Entrepreneurship?

Answer 8

The people who come up with the idea for the business and for the products made by the business. Eg, the owner of the company, a recipe for the bread

Question 9

What is Land?

Answer 9

all the raw materials needed to produce the good or service. examples, flour, yeast, water, salt and electricity.

Question 10

What is Labour?

Answer 10

The people who work to produce the relevant goods and services. Eg, bakers, office staff, shop assistants.

Question 11

What is a basic economic problem?

Answer 11

Scarcity

Question 12

What is scarcity?

Answer 12

Scarcity means there are limited resources available to meet unlimited wants.

Can come in the form of money, labour, or gold.

Question 13

What is an opportunity cost?

Answer 13

The next best alternative that we gave up when we chose the thing we chose

Add-ons:
- When we make a choice, there is a winner (the thing we chose) and a loser (the thing we did not choose).
- Opportunity Costs arise from every decision made!

Question 14

What is the relationship between scarcity and opportunity cost?

Answer 14

Opportunity costs arise from production decisions due to the scarcity of resources.

Add-ons:
- Resources are limited, so a person may not be able to afford all they want or need.

Question 15

What is the cost-benefit analysis?

Answer 15

Carefully weighing up the advantages & disadvantages to help you make the best decision.

Question 16

What are Economic Performance and Living Standards? POSITIVES

Answer 16

The best decisions about resource usage will maximise the satisfaction of people’s living standards.

Key Idea: Economic growth can lead to higher incomes, resulting in a higher standard of living.

Material living standards - access to goods and services and income.

Non-material living standards - quality of life factors such as leisure time, life expectancy, and air quality (intangible aspects that improve your lifestyle). Also your mental health, improvement tin education etc.

Question 17

What are Economic Performance and Living Standards? Negatives

Answer 17

Material Living Standards - economic growth may lead to disparities in material living standards, causing one’s mental health to deplete. Lack of access to goods can also make one’s life worsen. Environmental harm through pollution.

Non-material living standards - the stress of a growing economy and increases in living standards may cause unnecessary stress. economic downfalls may lead to unemployment and a lack of flow of income (Y) causing stress and mental health issues.

Question 18

What is the production of goods?

Answer 18

The tangible output that consumers can see, and touch such as cars, cell phones, etc. The production of goods involves the manufacturing process and different stages of production to transform into the final product

Question 19

What is the production of services?

Answer 19

The intangible output in society is the acts of deeds that provide value to consumers. This is often done in return for a profit, such as jobs. Examples of services are education, and healthcare.

Question 20

What is Globalisation?

Answer 20

means all the countries in the world are linked and should be seen as one. Australia is a prime example of globalisation as we trade with other countries around the world, work overseas and vice versa, and settlers come to live in Australia.

Question 21

Considerations Needed in Business Ventures

Answer 21

• Creativity
• Who the target audience is going to be?
• How will it stand out from the rest of the competition?
• Is this business idea profitable?
• Is there a gap in the market?
• Cost of good/service?

Question 22

Ethical Considerations (demonstrating corporate social responsibility ‘CSR’)

Answer 22

• Minimal impact on the environment
  THE RATING:
• climate commitment
• using sustainable fibres
• pay of workers/listen to workers