Business and economy

Question 1

What is Economics?

Answer 1

The decisions you make. It determines whether or not you’ll be able to buy products, based on how much they cost and the availability to you.

Question 2

3 things we need:

Answer 2

• Food.
• Water.
• Air.

Question 3

3 things we want:

Answer 3

• New iPhone.
• Car.
• Clothing.

Question 4

What are needs?

Answer 4

Goods/services people believe are necessities of life. Such as water, clothing, health care etc.

Question 5

What are wants?

Answer 5

Goods/services that help us enjoy everyday life, such as cars and entertainment. These are things we want, but don’t need them to survive unlike our needs.

Question 6

Relative Scarcity.

Answer 6

Describes the imbalance of unlimited wants, and resources which are limited. Choices must be made on what to produce due to limited resources.

Question 7

Goods definition.

Answer 7

Physical items that you can touch and pass onto another person. These items are transferable.

Question 8

Services defintion.

Answer 8

They cannot be touched, not transferable: cannot be passed onto someone else.

Question 9

Natural resources.

Examples:

Answer 9

Useful raw materials we get from the Earth, occur naturally which means humans can’t create them.

• Mineral resources.
• Forests.
• Water.
• Oceans (fishing)
• Fertile agricultural land.

Question 10

Labour resources (Human).
Examples:

Answer 10

Human resources that describe the human work effort, both physical and mental, used in the production of goods and services.

• Electricians.
• Teaching.
• Flying planes.
• Carpentry.

Question 11

Capital resources.

Examples:

Answer 11

Equipment is made by people to help with production.

• Hammers.
• Computers.
• Desks.
• Fences.
  eg. A secretary uses a computer.

Question 12

Enterprise.

Example:

Answer 12

A person who uses their initiative, drive and personal goals to start and maintain a business.
- Bill Gates, Microsoft.

Question 13

Law of demand

Answer 13

As the price of an item increases, consumers will be less willing and able to pay and demand will decrease.
As the price of an item decreases, the quantity of that item demanded by the market will increase.

Question 14

Price Mechanism

Answer 14

Producer supply and consumer demand interact in the marketplace to set prices for goods and services.

Question 15

Opportunity Cost

Answer 15

When making decisions one of the choices must be given up.

Question 16

Market

Answer 16

A potential buyer interacts with a potential seller, and there is a means of exchange.

Question 17

What and how much to produce?

Answer 17

• Consider consumer.
• Competetors.
• Consumer is in charge.

Question 18

How to produce?

Answer 18

• Location.

- Ingredients.

Question 19

For whom to produce?

Answer 19

• The price.
• Driven by the market.
• Making a profit.

Question 20

Demand Factors.

Answer 20

• Price of substitutes product.
• Preferences.
• Income.
• Price of complementary products.
• Consumer expectations.

Question 21

Price of substitutes product.

Answer 21

The demand of a product increases as consumers switch to your product.

Question 22

Preferences.

Answer 22

Changes in tastes and preferences affect demand. Persuasive advertising is used to change tastes and preferences, and increase demand.

Question 23

Income.

Answer 23

When someone’s income increases they are able to purchase services and goods that are increasing in demand.

Question 24

Prices of complementary products,

Answer 24

Products that ‘go with’ another. Products that are sold separately but are used together. This creates demand for the other.

Question 25

Consumer expectations.

Answer 25

Concern over job security or anticipation of a price increase.

Question 26

The law of supply.

Answer 26

As an item’s price increases, so will the quantity of that is supplied by producers will increase. If the price decreases producers will be less willing to supply and supply will fall.

Question 27

Supply Factors (ACE)

Answer 27

• Availability of Resources.
• Cost price of the inputs being used.
• Efficiency of resources.

Question 28

Availability of Resources.

Answer 28

• Labour force.
• Raw materials.
• Weather conditions and natural disasters.

Question 29

The cost price of the inputs being used.

Answer 29

• Changes in tax rates.
• Changes in wage rates paid.
• Changes in the cost of raw materials.

Question 30

Efficiency of resources.

Answer 30

• • Increased training for workers.
• New machinery/technology.
• New production methods, decrease the amount of waste.

Question 31

Equilibrium

Answer 31

When the demand curbve will cross the supply curve. (on graph)

Question 32

Positive of Sugar tax.

Answer 32

Decreasing rates of obsesity.

“10% of adults were classified as obese in 1980, whilst now 65% of adults are overweight.”