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Economics and Business - Coggle Diagram
Economics and Business
Needs and Wants
Need - a need is a required item for surviving such as: water, food and air
Want - a want is an item that is not required for survival and is for personal enjoyment such as: a phone, a dog or a laptop
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Producers and Consumers
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3 Types of Producers
Agricultural Producers or Primary Producers - A person or corporation that produces natural products like food, wood and oil
Industrial or secondary manufacturers make commodities primarily in factories. Clothing, phone, vehicle, and other manufactured items are all examples of things produced by industrial producers
Service Providers or Tertiary Producers - A person or corporation that provides labour, experience and skill for their clients
4 Types of Consumers
Loyal customers are people who will continue to buy goods and services from the same company for a long time. These consumers are extremely essential to a company because they account for a significant portion of sales.
Discount Consumers like to purchase things that are the most cost-effective. They frequently go to shops with a lower cost
Consumers who are impulsive are recognised for making fewer reasoned decisions about how to spend their money than the majority of the population. They are frequently drawn to a product's flamboyant advertising and high visibility.
Consumers that buy based on their needs only buy what they genuinely need. They try to avoid spending money on items or services that they do not believe are necessary at the moment.
Pricing Strategies
Premium Pricing - By setting a greater price than its competitors, the company aims to market itself as a high-quality luxury brand. This increased price will persuade consumers to buy the product because it seems superior to other products
Phycological Pricing - Many businesses often charge prices that are not rounded to the nearest dollar number. When presented with a variety of products and pricing, buyers are more likely to choose the $9.95 product over the $10.00 one. Even though the difference of five cents may appear minor, it is likely to attract greater clients.
Penetration Pricing - A company may enter the market at a low price in order to entice customers to try a new product. Once the product has a sufficient number of loyal clients, the company may raise the price to a more lucrative level.
Economy Pricing - Large retailers like Aldi and Bunnings, who buy in bulk, can often get merchandise at a lower price than smaller retailers. They seek to make a tiny profit on each sale, but due to the low price they can provide customers, they are able to make a large number of transactions.
Factors of Production
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Enterprise - The ability of a person or a group of people to gain a profit from the combination of labour, land and capital
Opportunity Cost - opportunity cost is loss of a potential alternative to whatever you have bought. If you buy a lollipop the opportunity cost could be another lolly
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Why Do People Work
Material Reasons such as income, superannuation and other bonuses
Non-Material Reasons such as experience, pride, contribution, express creativity and make friends
Work Life Balance - the balance between having a social life and a working life. This is important to have to stay on top of your mental wellbeing
Types of Work
Full Time Work - Full-time workers are individuals who work 35 hours or more each week on a regular basis. Casual workers typically receive fewer benefits, such as sick leave and annual leave, than full-time workers.
Part-time - Permanent part-time employees are entitled to the same benefits as full-time personnel, but they work fewer than 35 hours a week.
Casual - Casual employees are not required to work defined hours and do not have access to many of the same leave benefits as permanent employees. Casual workers are often paid more than permanent workers performing the same job due to the lack of job security and lost benefits.
Contract Workers - A contract work arrangement is one in which an employee works for an employer for a certain period of time on a specific assignment that is outlined in the contract. They have the option of working part-time or full-time on the job, depending on the terms of the contract. Contractors who work on a contract are not guaranteed any additional work once the task they were hired to undertake is completed. They are not entitled to any benefits, such as sick leave, as full-time and part-time employees are.
Volunteer Work - Labour allows people to make a beneficial contribution to society, but some people feel compelled to help others to the point where they will work for free. This is known as unpaid volunteer work, and it is widespread among many charities and institutions that strive to improve the world
Earning an Income
Starting a business can be a good way to earn a income if done correctly but it is quite difficult to do it correctly. You need to invest your money, time and effort into the company and a lot of sacrifice has to be made. There is never a guarantee that your business will be successful
Investing in shares is a gamble. You have to earn money to invest and then wait for shares of the company you are looking to invest in to drop in price and then wait long enough to get a decent return. Investing in shares is very difficult because any money you put in you may not get back
Owning a property is a decent way to earn money if you have the cash flow but it requires lots of work and dedication. You need the money to obtain the property in the first place and then you need to make sure the place is up to regulation to rent out and then you need to continuously inspect the property and make sure the client is happy. Owning property is never a guarantee of an income