Term 4 - Economics and Business
MAKING CHOICES
SPECIALISATION AND TRADE
INTERDEPENDENCE
SCARCITY
Money
Land
Resources
ALLOCATION AND MARKETS
ECONOMIC PERFORMANCE
When the cost of producing or obtaining a particular resource is high, not everyone will be able to obtain it.
In some cases people do not have enough money to buy a house to rent it, but in worse cases people don't have a house
Consumers/Individuals rely on the producers to survive and to fill their unlimited needs and wants.
Producers/ Businesses are the ones that make the products for us to buy. The Producers need to satisfy the consumers needs and wants
Australia also trades services with other countries such as teachers and doctors for miners or car engineers
Australia has resources that other countries don't such as gold, iron and nickel. They can then trade these goods for different goods like cars
Gross Domestic Product (GDP) – the total value of goods and services produced in a country over a year
Employment Decisions: Employment Decisions are the decisions such as what career path to follow
Business Decisions: Business Decisions are the decisions are made by businesses such as to produce and sell a product or not
Financial Decisions: Financial Decisions are the decisions on whether to save money or spend money.
We have limited or scarce resources such as coal, iron, copper and gas. Coal is used for electricity and copper as electrical wires. Gas is also a resource we rely on it used to power cars.
Many people in this world suffer from money scarcity, this means that they do not have enough money to buy the limited resources such as water food and shelter.
If people do not have enough money they cannot buy the shelter they need to survive, this causes diseases, because of flies and mosquitos.
Scarcity is the economic problem of have unlimited needs and wants but limited resources. Scarcity is a dominant problem all over the globe
Interdependence refers to the way we rely on others to satisfy our wants and needs. Participants in our economy, including producers, consumers, businesses and the government, depend on each other to produce, specialise and consume goods and services. The circular flow is the diagram we use to describe interdependence.
Making choices is an important part of economics. As consumers, we make choices about what we want to buy to satisfy our needs and wants.
Many countries around the world are unable to produce the variety of goods and services required to support the wants and needs of their countries, so they survive on trade.
The concept of allocation refers to the way we distribute our scarce resources among producers. It also refers to the way we then distribute scarce goods or services among consumers.
Economists measure how well an economy is doing, known as its economic performance, using a wide variety of methods, including the OECD better life index, a system that ranks countries in a range of different categories such as income, housing and jobs from 1 - 10.
Inflation – the general increase in prices of goods and services, measured by GDP
The unemployment rate – the percentage of people who are unemployed out of all people who are able to work / part of the workforce