BUSINESS: Economics - Term 1

Question 1

What are GOODS?

Answer 1

physical items

Question 2

What are SERVICES

Answer 2

jobs or tasks we pay others to perform for us

Question 3

complementary wants example:

Answer 3

bread and butter
shoes and socks
milo and milk

Question 4

Wants are essential?

Answer 4

No - they are things we desire in order to live our lives

Question 5

Needs are essential?

Answer 5

Yes - they are items essential for everyday survival (eg: water, food, shelter, healthcare, clothing)

Question 6

What is the ECONOMIC PROBLEM?

Answer 6

scarcity (limited amount of resources) vs unlimited needs & wants

Question 7

What is the solution to the ECONOMIC PROBLEM?

Answer 7

satisfy wants & needs which varies for each group

Question 8

What is OPPORTUNITY COST?

Answer 8

what you give up when you choose to use your economic resources in a particular way
= value of opportunity lost (next best alternative)

Question 9

What is another word for OPPORTUNITY COST?

Answer 9

next best alternative

Question 10

Pure market is controlled by:

Answer 10

business and consumer

Question 11

Controlled market is controlled by:

Answer 11

entirely government

Question 12

Mixed market is controlled by:

Answer 12

Government, business and consumer (all work together)

Question 13

High price = ____ demand

Answer 13

low

Question 14

Low price = ____ demand

Answer 14

high

Question 15

Supply line benefits _____

Answer 15

producers

Question 16

Demand line impacts _____

Answer 16

consumers

Question 17

What is the EQUILIBRIUM

Answer 17

where supply and demand meet to determine price

Market price

agreement between producers and consumers

Question 18

5 main factors affecting DEMAND (5 shifters of demand)

Answer 18

1. tastes/preferences
2. number of consumers
3. price of complementary/related goods
4. income
5. expectations

Question 19

5 main factors affecting DEMAND (5 shifters of demand)

Answer 19

1. tastes/preferences
2. number of consumers
3. price of complementary/related goods
4. income
5. expectations

Question 20

5 main factors affecting SUPPLY (5 shifters of supply)

Answer 20

1. price of resources
2. number of producers (competition)
3. technology
4. tax and subsides
5. expectations

Question 21

5 main factors affecting SUPPLY (5 shifters of supply)

Answer 21

1. price of resources
2. number of producers (competition)
3. technology
4. tax and subsides
5. expectations

Question 22

what does a Cost Benefit Analysis (CBA) do?

Answer 22

Compares the positive benefits of a project, policy or decision with the negative aspects or costs associated with the same project or activity.

Helps individuals, businesses and governments to choose the next best alternative (opportunity cost) to achieve maximum satisfaction of their needs and wants.
[ helps reduce the mistakes that could possibly be made ]

Question 23

what does CBA look at?

Answer 23

environmental, social and financial

Benefits - what does it satisfy? what are the benefits of this decision

Costs - what is the downside?

Opportunity cost - what is the next best alternative? what could have been done with that money/space instead?

Question 24

Decrease in demand - line shifts to the _________

Answer 24

Left

Question 25

Increase in demand - line shifts to the ______

Answer 25

right

Question 26

decrease in supply - line shifts to the _____

Answer 26

left / higher

Question 27

increase in supply - line shifts to the _____

Answer 27

right / lower

Question 28

what are the 4 types of resources

Answer 28

land, labor, capital, enterprise

Question 29

for resources to be available they must have these 5 characteristics:

Answer 29

1. limited 2. known about 3. accessible 4. useful in production 5. able to satisfy wants

Question 30

what is the producers motive?

Answer 30

to get a profit and make as much money as possible

Question 31

what is the consumers motive?

Answer 31

to satisfy their wants for the cheapest price they can

Question 32

what is an example of each type of resource? (land, labor, capital, enterprise)

Answer 32

land = water labor = cutting a tree capital = tools and machinery enterprise = CEO of a business

Question 33

what is land (resource)?

Answer 33

land includes all natural materials or resources used in the production of goods and services

Question 34

what is labor (resource)?

Answer 34

the effort used in the production of goods and services (eg: cutting a tree)

Question 35

what is capital (resource)?

Answer 35

included resources made by labor to assist in the production of goods and services (eg: machinery/tool (hammer) )

Question 36

what is enterprise (resource)?

Answer 36

the act of brining together the factors or production in order to produce goods and services

Question 37

DEFINE economics?

Answer 37

predicts and studies human and group activity to predict future trends. involves decision making based on available resources goal is to achieve satisfaction (resolution) which varies for each group

Question 38

MICRO groups = ______

Answer 38

individuals & households

Question 39

MACRO groups = ________

Answer 39

government & global