Flashcards in Business & Economy Deck (20)
A situation where potential buyers are in contact with potential sellers and there is a means of exchange.
Define means of exchange
A method of payment for goods and services
The use of goods or services as a means of exchange
What is scarcity?
Not having enough resources to meet the infinite needs and wants of consumers
What are the 4 resource groups?
Natural (land), labour, capital and enterprise
What are natural/land resources?
Occurs naturally eg. Land, water, minerals
What are capital resources?
Man made and used in production eg. Tools, computers
What are labour resources?
Work, physical and mental contribution eg. Teaching, pilot
What is enterprise?
A person who uses initiative, drive and goals to create and maintain a business
What is opportunity cost?
The lost alternative to which the economic resources could have been allocated.
What is cost benefit analysis?
Involves making a list if the costs and benefits of each alternative proposal and comparing them to reach a conclusion.
What are the 3 economic choices?
What to produce?
How to produce?
Whom to produce for?
What are needs?
An item that is necessary to survive everyday basic life, eg. food
What are wants?
An item that a person desires, but is not essential for survival or basic living, eg. Designer clothes
The study of the distribution and management of resources, and the fluctuation of prices and the supply and demand of goods and services.
What does the demand curve state?
That when the price is high, the demand is low and when the price is low, the demand is high.
What does the supply curve state?
That when the price (profit) is high, the supply is is high and when the price (profit) is low, the supply is low.
What is the equilibrium point?
The point at which the supply of a product and the demand for a product are equal.
Define disposable income
Disposable income is remaining money people have left over after tax to spend as they like.