Economics Week 5 Flashcards
(39 cards)
Needs
Things you need to survive, eg. adequate food, shelter, clothing and fresh water
Economics
It is how individuals, groups and whole societies go about satisfying their needs and wants
Wants
Things you own or would like to own but dot necessarily need to survive. They are unlimited and changeable with age, income and lifestyle.
Goods
Things you can see and touch
Sevices
Something provided to you by others with the exchange of money
Collective Goods and Services
Goods and services are whole community needs or wants eg. Defence force, ovals. Usually provided by the government
Consumer
Someone who purchases goods and services to satisfy their needs and wants
Economic Systems
The way resources are organised in order to produce as many as possible of the goods and services people want
Demand
Denotes the amount of a particular good or service that businesses are willing to buy at a particular price
Supply
Denotes the particular price of a particular good or service that a business is willing to sell at a particular price
Market Equilibrium Price
The price a which the quantity demanded is equal to the quantity supplied
Market Economy
Is one in which most economic decisions are made by the buyers and sellers
Opportunity Cost
The cost of an alternative that it’s be forgone in order to pursue a certain action. The benefits you could receive by taking an alternative action
Scarcity
Where people haw unlimited wants but resources are limited and decisions must be made to allocate resources efficiently
Economic Problem
That there is an unlimited number of wants but a limited resources absolve to statisfy. Is how to allocate scarce resources within the economy
Law of Demand
The higher the price, the lower the quantity demanded. This is because the consumers opportunity cost to acquire goods and services increases and they must make take offs to afford the new found expense.
Law of Supply
As the price of something increases, producers will offer more or produce larger amount of the object for sale. Example - When consumers start paying more for cupcakes than donuts, bakeries will increase their output of cupcakes and reduce the amount of donuts in order to increase their profits
Resources
The economical definition of a resource is a good or service used to satisfy human wants and needs. Land, labour, capital and enterprise
Land
- Natural resources; minerals, soil, marine stocks, weather, climate, weather and scenic landscapes
- Limited in supply
- Exhaustible
- Aren’t easily replaceable eg. Iron
- Some replenish able with renewable management
Labour
- Human resources; intellectual or physical effort/skill that goes into producing a good or service
- Occupations need different things
- Rapidly changing with higher training/qualifications/education
Capital
- Man made or manufactured goods necessary to produce other goods and services
- Tools, equipment, machinery, roads, bus’s
- May be either consumer, capital or both goods
- Jets, trains are capital as they produce a service consumers pay for
- Spending by a business on capital goods is referred to as an investment or capital expenditure
Enterprise
- Human resource; entrepreneurship or entrepreneurial skills
- Ability to combine all three factors to produce goods and services demanded
- Successful ones will see an opportunity and create a business for their target
- Choose low costing three factors to enable best competitive price and best profit
Price Mechanism
The automatic adjustment of prices in a market, determined by the forces of supply and demand
Planned Economy
- Command or Communist System
- Everything bongs to government or state
- Government with committees decide on the production outcome
- Government production units decide on who will do what and how things will be made
- Enough to meet the plan targets and people are punished when productions weren’t reached
- China, North Korea
