Economics + Business

Question 1

The Economic Problem

Answer 1

The basic economic problem is that an economy has finite (limited/scarce) resources, but that humans have unlimited wants and needs

Question 2

What are 3 Questions that arise from ‘The Economic Problem’

Answer 2

1. What to produce?
2. How to produce it?
3. For whom to produce it?

Question 3

Macroeconomics

Answer 3

A branch of economics that focuses on economy wide (large-scale) issues such as economic performance, growth, inflation, etc.

Question 4

Microeconomics

Answer 4

A branch of economics that focuses on individuals and small-scale business issues such as making decisions especially regarding the allocation of resources and behaviour of costumers

Question 5

Recession

Answer 5

An economic recession is where economic growth falls for two or more quarter (that is, six or more months) in a row.
Australia has had four recessions since 1960:
1961, 1974-1975, 1982-83 and 1990-91

Question 6

What are the 5 Key Concepts of Economics and Business?

Answer 6

The 5 Key Concepts of Economics and Business are:

1. Allocation
2. Economic Performance
3. Interdependence
4. Scarcity
5. Specialisation

Question 7

Allocation

Answer 7

A key concept in economics and business: the way scarce resources are distributed among producers, and how scarce goods and services are divided among customers

Question 8

Balanced Budget

Answer 8

When government revenue is exactly equal to expenditure

Question 9

Better Life Index

Answer 9

The OECD Better Life Index measures wellbeing across countries, based on 11 topics that cover areas of material living conditions and quality of life

Question 10

Business

Answer 10

An organisation that engages in commercial activities, often by producing goods or selling goods or selling goods or services

Question 11

Business Processes

Answer 11

A series of tasks or actions that are undertaken by a business to produce its product

Question 12

Capital Resources

Answer 12

Inputs from man-made goods, such as machines or computers, that are used to produce further goods and services

Question 13

Carbon Tax

Answer 13

Polluters being charged a tax to pay per tonne of carbon released into the atmosphere

Question 14

Cause-and-Effect Relationship

Answer 14

Where one event or action is the result of the other

Question 15

Circular Flow of Income

Answer 15

The concept that producers rely on their customers to buy their goods or services so that they can continue to produce them, while consumers’ ability to earn an income, and therefor purchase goods and services, relies on producers

Question 16

Consumer

Answer 16

An individual who purchases goods and services for personal use

Question 17

Consumer Price Index (CPI)

Answer 17

A measurement of retail price changes of a constant basket of goods and services, representative of what households in Australia spend

Question 18

Deficit Budget

Answer 18

When government revenue is less than government expenditure

Question 19

Depreciation

Answer 19

An asset such as a computer reducing in value over time due to wear and tear

Question 20

Depression

Answer 20

When economic activity is in decline over the long term

Question 21

Deregulation

Answer 21

Reducing or eliminating government power in an industry to promote better competition in that industry

Question 22

Discrimination

Answer 22

Treating people differently or unfairly because of factors such as sex, race, religion, etc

Question 23

Domestic

Answer 23

Within a country

Question 24

Earn

Answer 24

To abstain money in return for labour or services

Question 25

Economic Growth

Answer 25

An increase in the amount of goods and services produced per person within a specific period of time

Question 26

Economic Performance

Answer 26

A Key Concept in Economics and Business: how well an economy is performing, measured by whether it is achieving its economic objectives

Question 27

Economics

Answer 27

The study of how people produce, consume and share wealth

Question 28

Economic System

Answer 28

The system that coordinates he production and distribution of goods and services

Question 29

Economies of Scale

Answer 29

Producing larger quantities of a good or service that results in reduced unit costs of production

Question 30

Economy

Answer 30

A system that involves the production, distribution, trade and consumption of goods and services by individuals, businesses, organisations or governments

Question 31

Final goods

Answer 31

Goods that are ready to be consumed now rather than being used to make other goods

Question 32

Expenditure

Answer 32

The amount of money spent by a person or government

Question 33

Export

Answer 33

To send goods to other countries to be sold

Question 34

Fiscal Policy

Answer 34

The government’s management of the federal budget, adjusting expenditure and tax rates to influence the performance of the economy