Economics

Question 1

Economics def

Answer 1

The study of choices and outcomes.
How these affect society
How to divide and distribute the limited resources that are available

Question 2

Wants

Answer 2

Something used to for fill desires and not necessary for survival

Question 3

Needs

Answer 3

Necessary for survival

Question 4

Relative scarsity

Answer 4

Referred to as the economic problem
Limited resources but unlimited wants.
Goods and services made to satisfy wants

Question 5

Opportunity cost

Answer 5

the loss of alternative options when another is chosen

Question 6

Economic resources

Answer 6

Land (natural resources)
Labor (human effort)
Enterprise (marketing)
Capital (machinery)

Question 7

Production Process

Answer 7

Inputs (economic resources)> Production> Outputs (goods and services)

Question 8

Markets

Answer 8

Where potential buys and sellers meet in order to purchase, sell, barter or trade items

Question 9

Market types

Answer 9

Traditional, Planned, Free market,

Question 10

Traditional market

Answer 10

a small community, centered on survival (they are their own buyers and sellers)

Question 11

Planned markets

Answer 11

Large amount of government intervention they own resources

Question 12

Free market

Answer 12

decisions made by consumers
Uses price mechanism
Suppliers respond to consumer demand

Question 13

Economic questions

Answer 13

What, How and for whom to produce for

Question 14

Economy

Answer 14

a countries production and consumption of goods and services

Question 15

Standard of living

Answer 15

An individuals materials wealth or non material issues(pollution, traffic, etc

Question 16

Price mechanism

Answer 16

where the profits of goods and services affect the supply and demand of the goods and services

Question 17

Consumer demand

Answer 17

Ability and willingness to pay
Abilty- enough money to pay asking prices
Willingness- want for the product

Question 18

Producer supply

Answer 18

Quantity of the product that they are willing and able to supply

Question 19

Equilibrium

Answer 19

Where consumer demand= Producer supply/ Demand=Supply

Question 20

Law of demand

Answer 20

Price increases= demand decreases
Price decrease= Demand increases
-Price influences demand

Question 21

Substitues

Answer 21

Alternative products that does the same function as the original product

Question 22

Complementary products

Answer 22

Products that pair with anohter

Question 23

Factors of demand

Answer 23

=Shift in demand

Question 24

Law of supply

Answer 24

Prices increase= Supply increases
Prices decreases= Supply decreases

Question 25

Factors of supply

Answer 25

Taxes, tech product price, input, availability/resources, Natural phenomena

Question 26

Surplus

Answer 26

lowered price, too much supplt; not enough demand

Question 27

Shortage

Answer 27

Demand increases too little supply

Question 28

Benefits of price mechanism

Answer 28

-Reduces surplus/shortage efficient resource allocation by suppliers consumer determines which of their wants are most important

Question 29

Gov correction of externalities

Answer 29

Strategies like taxes and subsides

Question 30

Taxes

Answer 30

Fees charged by government on activities income or products - Can tax negative externalities to prevent production and consumption

Question 31

Subsides

Answer 31

Sums of money from government, to help businesses keep product prices low - only beneficial products

Question 32

Externalities

Answer 32

Costs or benefits affecting individuals who are not directly involved in the production and consumption of goods and services

Question 33

Negative externalities

Answer 33

Unwanted social/ or financial costs of production and consumption -destruction and depletion of natural resources (wood/waterways)

Question 34

Positive externalities

Answer 34

Benefits enjoyed by third parties that result from production and consumption of others Example: Bicycle industry - Reduces carbon emissions -Increase health benefits

Question 35

Market failures

Answer 35

when markets alone fail to meet the needs of society (over or under supply) Price mechanism fails to allocate scarse resources

Question 36

Economic systems

Answer 36

Aim to address the key economic problems. Ways in which society's allocate limited resources with the unlimited demands

Question 37

Economic systems

Answer 37

Aim to address the key economic problems. Ways in which society's allocate limited resources with the unlimited demands

Question 38

Economic resources

Answer 38

Inputs required by the producer

Question 39

How do you measure material wellbeing

Answer 39

Collecting data and indicators of economic performance: economic growth unemployment inflation sustainability

Question 40

How do economics improve material wellbeing

Answer 40

It contributes to our material standard of living by allowing us to earn incomes, allowing us to access/purchase goods and services

Question 41

Monetary policies

Answer 41

Reserves Bank of Australia (RBA), managing money supply in the economy - Can increase and decrease interest rate

Question 42

Budgetary policies

Answer 42

Government manages taxation and spending - Can increase and decrease taxes -Controls government spending

Question 43

Economic growth

Answer 43

Measure of change in value of goods and services Uses GDP

Question 44

Price Stability

Answer 44

Sustained increase in price of goods and services

Question 45

Inflation

Answer 45

Necessary of 2-3% increase Measured every quarter (3 months)

Question 46

Economic/Business cycle

Answer 46

The growth in GDP overtime -peak -recession -recovery of economy

Question 47

Full employment

Answer 47

All people willing to have a job, over 15 years old. Everyone above 15 in Aus wroks

Question 48

Economic activity

Answer 48

Value of production, employment, income and money invested into a buiness

Question 49

Economic Policy

Answer 49

Policies that meet economic objectives