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business and economics - Coggle Diagram
business and economics
6 key concepts
scarcity is the economic problem is the economic problem of having unlimited needs and wants, but limited resources
making choices is an important part of economics and business. we make choices about what we want to buy to satisfy our need and wants based on what we want what we need and what we can afford.
specialisation and trade is about the fact that many counties around the world are unable to produce the variety of goods and services required to support the needs and wants
interdependence is the way we rely on others to satisfy our wants and needs. participants in our economy depend on each other to produce, specialise an dcomsume goods and services.
allocation and markets as a concept refers to the way we distribute our scarce resources among producers and the way we distribute goods and.or services among consumers
economic performance and living standards economists measure how well an economy is performing, called its economic performance using many different methods
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markets
if people ever need or want something we usually just go and buy it. that's what makes us buyer/consumers in order for us to be able to buy these things sellers/producers have to make and sell these things which they are usually happy to do as long as they make profit.
forein exchage
the foreign exchange market is the largest market in the world where different currencies from around the world are bought and sold. some people and businesses will trade currencies so that they can make purchases or other payments in other nations.
the stock market
the stock market or share market is where share in company are sold and bought. there sares represent part ownership of a company. when you do this your a shareholder.
labour market
the labour market is where worker sell their skills, knowledge and effort to employers. in return for their labour the business will pay the worker a wage.
housing market
housing market is where houses are bought sold and rented. houses satisfy the basic need of shelter. most people desire a house of their own to feel secure.
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supply and demand
demand refers to the amount of good or service that consumes will buy at a particular price. consumers want to pay as little as possible for a good or service. if price goes up people are less likely to buy the product.
supply is that while consumers are more willing to buy goods and services if they are cheaper, suppliers are more willing to produce goods and services when prices are at a higher rate. this is because when selling for a higher price the business will get a larger profit.
allocation of market
resource allocation refers to how we divide resources and how these resources are then distributed to consumers.
- land (natural resources that business uses)
- labour (employees that a business needs to produce, develop and sell)
- capital (money machinery and buildings businesses use to produce)
- enterprise (a businesses capability to combine land , labour and capital to make a profit)
what to produce
the goal of every business it to make profit. they aim to do this by producing goods and services to sell to buyers. they can decide what to produce based on the availability of resources to both them and their potential consumers.
how to produce
- increase production so that more goods or services are produced and sold using the same resources, which is often known as using an 'economy of scale'
- using cheaper materials, although tis might affect the quality of the product
- payogn lower wages to employees or producing goods overseas where the labour market is cheaper
- using machinery to replace human jobs
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government in the market
while some economists believe that the market forces of the supply and demand can allocate resources efficiently the government has to intervene in the market to act in the best interest of the society as a whole.
taxes have for thousands of year been collected by the government to pay for public goods and services. the goal of the australian tax system is to collect taxes it needs from areas of the economy that can afford to pay it.
one of the main problems with economies is the effect that some transactions have on the people that are not producing or consuming the good or service, like when someone purchases an environmentally unfriendly car, the producer enjoys a profit, the consumer enjoys a new car, but the pollution cause by said car is not paid for by the producer and consumer. society as a whole pays for the dirty air. when other people other then the consumer or producer are affected by the transaction it is called an externality
the federal budget outlines what money the australian government expects to receive and spend throughout the financial year.
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australian workers
workers in australia's labour market have far better working conditions then in many other countries.
One of the main goals of the australian government is to create enough jobs for its citizansand prevent unemployment . it does this by managing the economy in such a way that business have the potential to grow.
workers and their employers have made many disputes over the years. this is because a business is mainly concerned with make as large of a profit as the possibly can. which mean playing employees less. workers union is a small group of workers who join together to protect their rights and working conditions.
workers of the world
sweatshop factories are factories that pay their workers very low wages in poor working conditions. they are common in poorer nations where laws that protect employees are not enforced. workers are beaten, abused and forced to work incredibly long hours in unsafe environments
child labour affects around the 168 million children around the world between the ages of 5 and 14. they are often abused and not paid for their labour.
types of businesses
sole traders (proprietorships) are individuals who run their own business. while they can amply others to work for them sole traders are completely responsible for the failure or success for their business
partnerships are formed by two or more people who run the business together. the details of what each partner is responsible for and entitled to are often specified in a contract.
corporations (companies) are businesses that are separate legal entities to their owners. companies are more expensive and tricky to set up and maintain then ole traders and partnerships, but protect with limited liability.
cooperatives is a business setup made up of at least 5 members who contribute to the running of the business. although not common they are becoming increasingly popular as they make eac member feel equal regardless of their position.
a franchise agreement allows a person to use the name, products and services of an existing business, in return for a portion of the profits. franchises are popular as they allow the franchisee to use proven business model that is less likely to fail they must follow a set guideline set by franchiser as to how to run certain aspects of the business
responsible businesses
businesses have both rights an dresponcibilties. while it has the right to legally make a profit for its owner, it should do so in a way that doesn't harm others.
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consumer guarantees
the product will be
- be safe
- be of reasonable quality
- do all the things its meant to
- match description on the box
- not have any idden costs associated with their use or purchase
- meet all promises made about the product
- have spare parts or is able to be repaired or replaced unless told otherwise
services provided must:
- be provided with acceptable care and skill, taking all necessary steps to avoid loss or damage
- achieve results that customer and business agreed to
- be delivered within a reasonable time if there