Economics Test

Question 1

Economics

Answer 1

The study of how people choose to use scarce resources.

Question 2

Four factors of production

Answer 2

Land
Labour
Capital
Enterprise

Question 3

Equilibrium

Answer 3

When supply and demand are in balance this is market equilibrium.
-> quantity demanded=quantity supplied

If demand is greater than supply there is going to be a shortage of goods

If supply is greater than demand there is going to be oversupply

Question 4

Scarcity

Answer 4

Unlimited wants or needs for limited goods and services.

Question 5

Economic good

Answer 5

Are scarce and not enough available to meet our wants.

Question 6

Free goods

Answer 6

Are not scarce and there is enough available to meet our wants.

Question 7

Difference between producer and consumer

Answer 7

Producers make goods and services

Consumers buy and use the products

Question 8

How does scarcity occur

Answer 8

Scarcity occurs when people want more than there is available

Question 9

To stop us from buying on impulse we

Answer 9

Should create a list and keep to a budget to avoid such mistakes

Question 10

Types of market structure

Answer 10

Monopolistic- clothing industry 
Pure or perfect- fruit and vegetables
Duopoly- Coles and Woolworths 
Oligopoly- car manufacturing 
Monopoly- Australia post

Question 11

Fraud/Scam

Answer 11

A scheme intended to gain personal and financial information

Question 12

Consumer

Answer 12

Someone who buys and uses goods and services

Question 13

Producer

Answer 13

Someone who provides goods and services

Question 14

Good

Answer 14

Physical things that you can see and touch

Question 15

Service

Answer 15

Actions that other people might perform for us and are not physical items

Question 16

Market

Answer 16

A place where people exchange goods and services

Question 17

Law of demand

Answer 17

If the price increases the demand decreases and vice versa

-> demand rises as price falls

Question 18

Law of supply

Answer 18

As the price increases the quantity also increase

-> the higher the price the higher the quantity supplied

Question 19

Consumer demand

Answer 19

Price
Quality 
Brand
In trend
Peer pressure 
Advertising

Question 20

Need

Answer 20

Something we can’t do without

E.G. Food, water, shelter

Question 21

Want

Answer 21

Not absolutely necessary

Question 21

Demand

Answer 21

Willing and able to buy to buy at a particular price

Question 21

Demand schedule

Answer 21

A table of the quantity demanded of a good at different price levels

• > Used to make a demand curve (demand curve always goes down)
• > TALL: Title, Axis, Labels, Line

Question 22

Supply

Answer 22

Is the quantity of goods and services a producer is willing to make

Question 23

Circular flow of income

Answer 23

Government 
Household
Financial
Overseas 
Business/producer

Question 24

Australian consumer law

Answer 24

Protects the rights of both buyers and sellers

Question 26

Acceptable quality

Answer 26

Suitable for purpose
Safe to use
Last a reasonable time
Of acceptable appearance (fit description)

{if not we have the right to the 3r’s}

Question 27

3R’s

Answer 27

Replacement
Repair
Refund

Question 29

Product Recall

Answer 29

Retrieving goods from consumers with compensation

Question 30

ACCC

Answer 30

Australian Competition and Consumer Comission

-> role is to protect consumers from unsafe products and inform them of potential risks and regulate industry

Question 31

Compensation

Answer 31

This is awarded to make up for loss or injury

Question 32

Warranty

Answer 32

Warranty is when a company promises that they will replace, repair or refund a product if faulty or broken.

Question 33

Monopoly

Answer 33

When there is only one business selling a particular product
-> Australia post