Commerce Exam Flashcards
Economy
A system of the sale, production, distribution and consumption of goods and services by people and groups
Opportunity cost
The value of the next best alternative use of resources
Profit
money business earns - expenses
Revenue
This income a business receives from sales
Exchange rate
The amount of one currency that can be exchanged for another
Injection
Money that enters the economy
Leakage
Money that leaves the economy
Globalisation
The interconnectedness of countries around the world
Commodities
Raw materials that can be bought or sold
Economies of scale
Savings in costs resulting from higher levels of production
Import
Resources from a country into Australia
Export
Resources from Australia to another country
Natural resource
Come from nature
- coal
- fish
- wood
Labour resource
Physical skills of workers that are needed to sell goods and services
- store manager
- bricklayer
- nurse
Capital resource
Manufactured resources used to produce and transport goods and services
- machinery
- buildings
- trucks
Problem of scarcity
Not enough resources for all the needs and wants of society. Use opportunity to decide the best option for each resource
3 economic questions
What to produce?
How to produce?
For whom to produce?
Communism
Pure planned economy
Pure competition
Pure free market
Subsistence economy
Producers self sufficient, no money, use methods like hunting and farming
e.g. Alaska, Greenland
Market economy
Exchange goods and services, no government involvement, producers decide what to produce
e.g. Australia, Japan
Planned economy
Government owns resources and makes decisions, no private enterprise
e.g. North Korea, China
Mixed economy
Mix of planned and market economy, government and private enterprise
e.g. most countries a mix, some more one than the other
Consumers
- buys goods and services
- earn wages
- pay taxes
