Money, Money, Money
You have $20. You can buy either a movie ticket or dinner. If you choose the movie, what is the opportunity cost?
The dinner you gave up.
You see an advertisement for the latest iPhone and suddenly decide you need one. What is the advertisement trying to influence?
Your consumer behaviour.
Australia sells iron ore, wheat and wine to other countries. What is this called?
Exports.
Which organisation collects taxes and spends money on schools, hospitals and roads?
Government
You have one hour before school. You can sleep, study or play video games. You choose to play video games. What is the opportunity cost?
The next best alternative you gave up: probably sleeping or studying.
A chocolate bar costs $2. You have $10. If the price rises to $5, you can now buy fewer chocolate bars. What economic concept is this showing?
Scarcity
Why might a shop reduce the price of winter jackets at the end of winter?
Demand has fallen and the shop wants to sell its remaining stock.
Australia buys cars, computers and clothing from other countries. What is this called?
Imports
If the economy is struggling and unemployment is rising, what might the government do to encourage economic activity?
Increase spending and/or reduce taxes.
A celebrity promotes a particular brand of sneakers. Why might the company pay the celebrity?
To influence consumer preferences and increase demand for the product.
You receive $50 for your birthday. You can spend it, save it or donate it. What are the three main economic choices you could make with this money?
Consume, save or donate/invest.
Taylor Swift announces a concert in Melbourne. Tickets sell out almost immediately. What has happened to demand?
Demand is very high.
Why might Australia import bananas even though bananas can be grown in Australia?
Other countries may produce them more cheaply or efficiently, or may produce them at different times of the year.
Who sets the official cash rate in Australia?
Reserve Bank of Australia (RBA)
A drought destroys a large percentage of Australia's wheat crop. What might happen to the price of wheat?
The price may increase because supply has fallen.
Why can’t everyone simply have everything they want?
Resources are limited, but human wants are unlimited.
A new gaming console is released, but there are not enough consoles available for everyone who wants one. What is likely to happen to the price?
The price is likely to rise.
If the Australian dollar becomes stronger compared with the US dollar, would Australian tourists generally find it cheaper or more expensive to travel to the United States?
Cheaper
If interest rates rise, what might happen to the amount of money households spend?
Spending may fall because borrowing becomes more expensive and saving becomes more attractive.
A new technology allows factories to produce twice as many products with the same number of workers. What might happen to productivity?
Productivity increases.
You spend $100 on a concert ticket but decide not to go. Your friend offers you $40 for the ticket. What is the sunk cost, and should it influence your decision?
The $100 is the sunk cost. It should not influence the decision because it has already been spent.
A café increases the price of its coffee by 20%, but sales fall by only 2%. What does this suggest about demand for its coffee?
Demand is relatively inelastic: customers are not very responsive to the price increase.
A country places a tax on imported cars to make imported cars more expensive. Why might a government do this?
To protect domestic industries and make locally produced cars more competitive.
The government spends billions of dollars building new railways and roads. How could this increase economic activity?
It creates jobs, increases incomes and increases demand for goods and services.
You have $100. You can either spend it today or save it for a holiday next year. Why is this an economic decision.
Because resources are limited and choosing one option means giving up another. The decision involves scarcity, choice and opportunity cost.