Economics
What is scarcity?
Refers to the economic problem of having limited resources with unlimited wants
What are needs, and give an example?
Things that people must have to survive e.g. basic food, shelter, water.
What are wants, and give an example?
Things that people would like to have but can live without e.g. new phone, nice clothes
What is barter?
The direct trading of goods and services between people without the use of money
What is opportunity cost, and give an example?
Value of the thing given up when a choice is made between two things e.g. choosing between a cupcake or a muffin
What is a consumer?
Someone who buys goods and services
What are services, and give an example?
Actions done for others in exchange for payment e.g. mechanic, painter, teacher.
What are goods, and give an example?
Tangible items that people consume or use e.g. pencil, shoes, TV's.
What are exports?
Goods and services sent to the overseas sector
What is land, and give an example?
The natural resources used to produce goods or service e.g. coal, cotton, fruit
What is a producer?
Someone who makes goods or provides services
What is economics?
The study of how individuals, governments and business make choices about allocating scare resources
What is labour?
The effort people contribute to the production of goods and services
What is a business?
This is an organisation engaged in the trade of goods and services to consumers.
They can't buy a porsche, you can't install a new pool (whatever your next highest valued option is)
What is a command/planned economy, and give an example of a country using this system?
Economic system in which the government controls and sets prices e.g. North Korea, China, Russia
What is specialisation?
This occurs when each individual member of the economy has a unique set of talents, abilities, skills and interests that make them uniquely able to perform a certain job
What is a traditional economy, and give an example of a country using this system?
Economic system in which barter is used, and agriculture is the main employment e.g. parts of Africa, South America, Asia.
What is a mixed market economy, and give an example of a country using this system?
A system that protects private property and allows a level of economic freedom, but also allows for governments to interfere in economic activities in order to achieve social aims e.g. Australia
What is economic thinking? When is something a good or bad decision?
This term analyses the way the world works by comparing the costs of any activity with the benefits generated by the activity.
Good decision = benefits outweigh costs
Bad decision = costs outweigh benefits
What are the four factors of production, and give an example of each?
1) land (e.g. cotton, farmland)
2) labour (e.g. a teacher, a carpenter)
3) capital (e.g. a tractor, a building)
4) entrepreneurship (e.g. Elon Musk)
What is a market economy, and give an example of a country using this?
The economic system in which individuals/businesses decide what, how, and how much will be produced/sold e.g. USA, Singapore
What is entrepreneurship?
Skills, initiative, and good new ideas that are provided by people to businesses
What are the three basic economic questions each country must ask when developing the economic plan, and give an example of each?
1) What goods/services will be produced? e.g. whether to make cheese or milk
2) How will goods/services be produced? e.g. whether to make by hand or machine
3) Who will consume the goods/services / how to distribute? e.g. average income, marketing etc.
What is the difference between traditional, developing, and modern economies?
Traditional - use barter, low life expectancy, low imports/exports, low economic growth, high population, high unemployment, high agriculture employment,
Developing - in between, on the way to modern
Modern - high life expectancy, high imports/exports, high economic growth, low unemployment, low agriculture, high service employment