Category 1
What is scarcity
Scarcity is an economic concept where individuals must allocate limited resources to satisfy their needs. Scarcity occurs when demand for a good or service is greater than availability
What is Macroeconomics
Macroeconomics studies the behavior of a country and how its policies impact the economy as a whole
What is Microeconmics
Microeconomics is the study of individuals and business decisions
What are the 4 economic sectors?
Household, Business, Financial, and Government
What are the 4 factors of production?
Land, Labour, Capital, and Entrepreneurship
Better working conditions: Safety conditions, more regulations, more procedures to ensure well-being of coworkers, automation/technology
What is the role of Trade Unions?
A trade union is an organised group of people who work together to protect the rights of other employees. A trade union may represent one profession or several areas of employment.
What's the difference between renewable vs non-renewable resources?
Renewable resources are those that can be replenished naturally over time. Examples include the sun, wind, and tidal energy. Non-renewable resources are limited in supply and cannot be replaced once depleted. Examples include fossil fuels (coal, oil, natural gas) and minerals.
Physical capital refers to tangible assets like machinery and equipment, while human capital is intangible and related to knowledge and skills. Physical capital is used in production, while human capital contributes to productivity through knowledge and abilities
What are some responsibilities of employees and employers in the workplace?
Employers must provide a payslip with information about pay and any deductions. Employees must carry out the work that is expected of them by the employer.
What are the 3 roles of trade unions?
1. Collecting & Bargaining: Trade unions negotiate with employers on behalf of their members to secure better working conditions, wages, and benefits. 2. Representation: Trade unions act as the voice of their members in interactions with employers and government bodies. 3. Mutual Support and Solidarity: Trade unions provide a sense of community and support for workers facing workplace issues
What's the role of the Government Sector?
The role of the government sector is twofold: Taxation & Government expenditure. They spend this money on:
Social programmes (medicare, centrelink, etc.)
Infrastructure (roads, trains, etc.)
Provide 3 different types on insurance, explaining how each can protect an individual.
Vehicle Insurance: Car insurance is a type of insurance policy a car owner can take out to help reduce the financial costs if their car is involved in an accident, is stolen, or is damaged – or causes damage – in another way.
Home Insurance: Home insurance covers your home and/or contents if it is damaged or destroyed due to an ‘insured event’. 2 types: 1. Buildings insurance is required by mortgage companies and banks.
It covers repair costs if your home is damaged, e.g. by fire or flood OR 2. Contents insurance is optional. It covers the cost of replacing your possessions if they’re lost or damaged.
It can be taken out even if someone is only renting a property
Income Protection: Is designed to replace your income based on your annual earnings in the 12 months prior to your illness or injury12. If you get sick or injured and can't work, the insurance company will cover a portion of your earnings, allowing you to pay everyday living expenses and bills
What is a direct consumer? Why do people prefer to be modern consumers?
These are consumers that choose to fulfill their own needs through producing goods themselves. This could take the form of a farmer growing their own crops and then harvesting the crops to feed their family.
Most consumers prefer to be modern consumers as it is much easier to purchase goods and services with money rather than producing them from scratch.
How can an individual protect themselves against financial risk?
• Make informed decisions and seek advice from qualified financial advisers.
• Be aware that all investments involve some level of risk, and understand the need to weigh up risk and return.
• Diversify by investing in a wide range of assets. You could invest in several different shares and have the rest of your money split between term deposits, property and managed funds.
• Have insurance, savings and superannuation.
• Manage debt.
What is GST and why doesn't the government charge it on items like bread, milk & fruit?
GST is General Sales Tax. The government does not charge GST on necessities. However, the government does charge tax on other things. For example, Sin Tax, which are extra taxes that are placed on products that society deems as unnecessary or even harmful.
What are the main functions of the household sector?
The household sector is made up of all consumers who also provide the labour for the business sector. In other words, they purchase the products and provide the labour to produce it.
What are the 4 the function of money in the economy? Explain
Medium of Exchange: It is something utilised to purchase goods and services globally
Measure of Value: Provides a standard unit of measurement.
Store of Value: Money you can be saved and used later.
Standard of Deferred Payment: Money can be used to pay debts in the future.
What are the main functions of the financial sector?
Some people and most businesses will need to borrow money at some point. They may need this for medical emergencies or to buy new equipment.
The organisations in the financial sector fulfil this need. Consumers in the household sector can store their money in a bank and earn interest and producers in the business sector can take out loans from the banks to grow their business.
Why is it important that the government charge taxes on both consumers and producers?
They use taxes on income or wealth both to raise revenue to finance public expenditure, and to redistribute resources and reduce inequality. Particular goods may be taxed to raise revenue, or with the aim of changing decisions to buy them.