HASS Economics and Business (6 Key Concepts of Economy (Scarcity (Scarcity…
HASS Economics and Business
6 Key Concepts of Economy
Scarcity is the economic problem of having unlimited needs and wants, but limited resources available. Also having scarce resources is good in a way. For example you have a very expensive brand with less resources that most cheap brands have and the expensive brand sells them for more because there is less of it. That is how Gucci or other brands cost so much
Making Choice is one of the hardest decisions is 6 key concepts. Say you have a Gaming PC that you really like and it costs $2000 but you only having $1500 and there is one for that price but you don't like it as much as the other PC but that is how much money you have.
Specialisation and Trade
Specialisation and trade is important to serve the needs and wants of people
Allocation and Market
allocation and market is when consumers and producers meet up and distribute scarce resources and offer cash for it
Interdependence is when producer rely on consumers who rely on producers. Producers rely on consumers to buy their products and make a profit when consumers need producers to make their needs or wants or goods or services.
Economic Performance and Living Standards
Economists measure how our economy is running by money etc.
Gross Domestic Product (GDP) is the total of the value of products made that year.
Interdependence is the way that us consumers rely on producers to make food and sell food for us while producers rely on us for our money and their profit. The circular flow chart relates to this.
4 factors of Production
Land - Natural resources such as coal and water
Labour - Human resources such as workers
Capital - Such as equipment
Entrepreneurship - when a skill or talent puts resources together successfully.
Supply and Demand
Demand/ Law of Demand
Consumers love to buy cheap products. If prices were reduced consumers would buy more and you would have more business. If prices increase the amount of consumers would drop severely which would mean less money.
Supply/ Law of Supply
Consumers love to buy products cheaply but producers love selling them for more so they create more profit and money.
Surplus is when producers have no customers or consumers so they have to lower their price to attract them
Government in involved in economics
Provision of goods and Services
Government can become involved in the marketplace as a supplier of goods and services. States and territory government supplies education.
Provision of infrastructure
Government is a big part of providing infrastructure. It includes railways roads and ports.
The government help people who immigrate from other counties with camps for them supplying fresh water and food
Public goods and services
Government provide many goods and services for the public. Some goods are toilets, Chairs, tables. Some services are bus services, fast food places, shops, playground etc.
Sole Traders (Proprietorship)
Sole traders, also known as proprietors, are individuals who run their own business. They are completely responsible for their success or failure of the business. If their business fails they might have to sell their car or home to pay off the debts of their business if it fails.
Partnerships are formed when two or more people agree to run a business together. Specified in a partnership agreement. Partnerships help the owners share the responsibility of running a business. Partnerships are cheaper to set up and run than companies
Are businesses that are considered separate legal entities to their owners. Limited liability, this means if the company fails, the owner will not be forced to sell their personal assets
A cooperatives is a business made up of at least 5 members who contribute to the running of the business
A franchise agreement allows a person (franchise) to use their name, products and services of an existing business (Franchiser), in return for franchise fees a portion of the profits made. The franchise must follow the guidelines set by the franchiser
It is important for a business to figure out exactly what kind of people will be buying its products. For example, the target market of a business selling toys would be for Children
Before a business decides on its location and target market. The business can get a better idea what to make and where to set up their business if they are targeting young kids or elderly
Different types of business will preform better in certain locations. Small online businesses can operate from home
Competition between is what drives them to improve the way in which they provide goods and services to customers. People will go to one area to buy their stuff and car shops are together because they show off their cars.
Influences on the way People Work
AI gives machines and robots the ability to think and act more like humans. The ability to do highly professional tasks such as analysing data, generating reports and even diagnosing patients.
Outsourcing refers to using and outside supplier to provide goods or services. Outsourcing labour overseas has mainly been to take advantage
Governments role in the Economy
As well as controlling the goods that come and go out of Australia, governments can regulate the movement of people coming in and out of the country.
Governments have the power to regulate what comes into and goes out of the country
Import – what comes in | Export what comes out
Welfare is government program which provides financial aid to individuals or groups who cannot support themselves. Welfare is also a pension for elderly that have retired and get an income. The disability support pension helps out the people with physical or mental disability to pay for hospital fees and other bills.
State governments and local councils have powers to control they type of buildings and other developments occurring with their borders. Governments regulate this because people could be building unsafe buildings on their property which could affect their neighbours.
Government in the Market
The main source of tax revenue in Aus is in the form of income tax, which is taken directly from the money people earn from working and goes to the government for roads and new shops
Society as a whole pay for this transaction with their loss of clean air. When people other than the consumer or producer are affected by a transaction in this way, it is known as an externality.
What money goes out
What money comes in