Key Terms
What is a consumer?
A person who buys and uses goods and services.
Which economic question asks businesses to decide what goods and services should be made?
What to produce.
What does labour mean in economics?
The physical and mental effort of workers.
What is the term for - The willingness of consumers to buy goods and services.
Demand
Which sector provides labour to businesses? What do they get in return?
Househoulds/Individuals - Income (wages, salary)
What is a mixed economy?
An economy where both businesses and government influence economic decisions.
What is a producer?
A person or business that makes or sells goods and services.
What are the three economic questions?
What to produce?
How to produce?
For whom to produce?
What are the four factors of production?
Land, Labour, Capital, Enterprise (Entrepreneurship)
On a supply and demand graph, which curve slopes downward?
Demand
What are the four sectors of the circular flow of income model?
Households (Individuals), Businesses (Firms), Financial (Banks), Government
Name three types of taxes used to fund public services in Australia.
Income Tax, GST (Sales Tax), Company Tax
Define 'market place'
A place or system where buyers and sellers meet to buy and sell goods and services. (can be in person or online)
Businesses to decide what goods and services should be made.
What is capital?
Equipment, tools and money used to produce goods and services.
What is meant by 'supply' in economics?
The quantity of a product or service that businesses are willing and able to sell.
What is meant by injections and leakages in the Circular Flow Model?
Leakages are money that leaves the circular flow of income, reducing spending in the economy. Injections are money that enters the circular flow of income, increasing spending in the economy.
Describe what is meant by a public service and provide two examples.
A public service is a service provided by the government to benefit the community. Examples: education, healthcare, police, firefighting, and public transport.
Define 'scarcity'
Tge economic concept that resources are limited, while human wants and needs are unlimited.
Descirbe what is meant by 'Whom to produce for'?
Who will receive goods and services (target market/customers).
What is meant by Entrepreneurship (Enterprise)
The ability to combine the other factors of production, take risks, and start a business.
Explain how supply and demand influence prices.
Supply and demand influence prices because they affect how much of a product is available and how much consumers want it. When demand is high and supply is low, prices tend to increase. When supply is high and demand is low, prices tend to decrease.
Why are savings considered a leakage, and how can it become an injection?
Savings are a leakage because money is not being spent. They become an injection when banks lend the money to businesses for investment.
Why does the government provide public services?
Governments provide public services to promote equality and provide services that private businesses may not offer because they are not profitable.
Compare and contrast goods and services. Provide an example.
Goods and services are both things that satisfy people's wants and needs, but they are different.
Give an example of a situation that demonstrates 'How to produce'?
"How to produce" means deciding the method, resources, and processes used to make a good or provide a service. It involves choices about who will do the work, what equipment or technology will be used, and how the product will be made efficiently. Example:
A burger restaurant must decide whether to bake its burger buns in-house each morning or order pre-made buns from a supplier.
Provide a real-life scenario that demonstrates the four factors of production.
A local café owner decides to open a new burger restaurant. The owner rents a building (land), hires cooks and wait staff (labour), purchases grills, ovens, and refrigerators (capital), and takes the risk of starting and managing the business (entrepreneurship).
What is the equilibrium point, and what does it determine in a market?
The equilibrium point is where quantity supplied equals quantity demanded. It determines the market price and quantity because buyers want to buy exactly the amount that sellers want to sell. At this point, there is no shortage or surplus.
Explain interdependence using three sectors of the Circular Flow Model.
Interdependence means households, businesses, and governments rely on each other. Households provide labour to businesses, businesses provide goods, services, and income to households, and governments collect taxes and provide services that support both households and businesses.
Choose one public service. Describe what it is, who benefits from it, and how it contributes to Australian society.
Education is a public service that provides people with knowledge, skills, and qualifications. Students benefit directly from education, while employers, families, and communities also benefit from having an educated population. Education improves the wellbeing of Australians by increasing opportunities, supporting employment, and helping people participate fully in society.