Markets and Circular Flow
what is traded on the housing market?
houses are bought, sold and leased to individuals
What is one way a business could reduce production costs?
increasing production, cheaper materials, lowering wages, producing overseas, machinery instead of human labour
how does the government receive an income?
taxation
Name 2 ways someone can earn an income
Property, Assets, Salary and stocks/shares, owning a business
Name one material reason people work
To earn an income, support family, staff discount, superannuation
What is traded on the labour market?
What is the economic problem?
unlimited needs and wants and limited resources
what is the difference between income tax, gst and company tax?
income is on individuals, company is on profits of a business and GST is auto-added to prices
How can someone earn an income from property?
Buying and then leasing to tenants at a profit or selling when the property gains value
Name 2 non-material reasons people work
passion, interest, social life, learn new skills, personal pride, mental health, self-esteem, success, work-life balance
What are the two sectors in the circular flow diagram
household and businesses
What are the 4 factors of production?
land, labour, capital and enterprise
name 3 areas the government spends money on?
defence, welfare, education, health, public services, transport
How do people make an income from trading stocks and shares?
Buying and then selling when they accrue value
Name one benefit and one disadvantage of casual work
Pro: higher wages, flexible hours
Con: no benefits or guaranteed hours
What do households provide to businesses in the circular flow model?
workers/labour and consumers who pay for goods and services
what is the law of demand?
as prices increase, demand decreases
why does the government maintain health and education as public industries?
to ensure all Australians have access to adequate education and healthcare regardless of income
What is one benefit and one risk of owning a business.
BONUS 200 POINTS: what percentage of business close in first 3 years of opening?
high profit potential, high risk of failure and require large start-up investment/effort
Name 4 reasons some jobs make more money than others
time worked, nature of the work, qualification and experience, available workers, laws and regulations
what do businesses provide to households in the circular flow model?
wages and goods/services
what is the law of supply?
as prices decrease, supply decreases as well
what would be the impact on the economy if the government reduced income taxes significantly?
increased consumer spending, lowered government revenue (less government spending)
What is the best investment for a young person with little income getting started? Explain why for the points
Shares as they have little upfront investment and are low risk.
Full time, part time, casual, contract, volunteer