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Economics & Business Term 4 Zhaedon Lowe - Coggle Diagram
Economics & Business Term 4
Zhaedon Lowe
6 Key Concepts
Specialisation And Trade
Definition: Countries will specialise in types of product in order to have extra that they can trade for things they need. This is because it might be more efficient or more cost-effective.
Example: Australia has good mining resources that we trade to the world for other things because it's more efficient for us.
Interdependence
Definition: Refers to the way participants in the economy rely on others to satisfy wants and needs.
Example: People go to the shops to buy wants and needs but we need the markets to sell and make those things.
Making Choices
Definition: Due to our limited resources ( such as time, energy and money). We have to make decisions aka " the economic problem".
Every decision involves an opportunity cost- the cost of the next best option you have given up when you make a choice.
Example: If we decide to go an buy a item but we think about the cost of it we might think to go an buy the next best option like instead of buying sneakers for $260 we might buy runners for $110 instead.
Resource Allocation
Definition:Every society has to make decisions about how these resources are allocated through an economic system.
In Australia, we have a market capitalist system- resources are owned by private individuals and businesses. Producers and consumers interact to make decisions. Business decide based on profit.
Example: A company will send a certain amount of supplies to markets depending how much of them that they are selling like cookies.
Scarcity
Definition: Having limited resources to achieve unlimited needs and wants.
Example: A need is a resource is like water and food we depend on it to survive. A want is a resource like a specific item like specific clothing and etc.
Economic Performance And Living Standards
Definition:Countries measure their economic performance by how well they can provide for people's needs and wants. Governments attempt to mange the economy.
Economic growth leads to an increase in living standards, or how comfortable people are in terms of what is available to them.
Example: If a country decides to sell certain resources to provide for the people and grow there economic to increase living standards having more things available.
GDP
Positive
The economy has a recession meaning that the economy is less than it's potential.
Negative
The economy has a inflation boom meaning the economy is operating bigger than it's potential more than full employment.
Importance Of GDP:it gives information about the size of the economy and how an economy is performing.
Types Of Unemployment
Influences On Consumers
Finance: How much money the consumer has influences what they can buy.
Marketing: Depending on how the product is represented this might influence a consumers decision wether to buy the product.
Availability: The availability of a resource can influence a consumers decision wether to buy the product considering if they can get it.
Age: Depending on age consumers decision choose what to buy wether if it's reasonable or not for there age which influences a consumers decision.
Price: The cost of a resource can influence a consumers decision wether to buy the product considering what they have.
Gender: Depending on gender certain things appeal and are made for that gender which might change a consumers decision.
Business Productivity
Labour Productivity: measures the hourly output of a country's economy.
Capital Productivity: measure of how well physical capital is used in providing goods and services.
Inflation
Definition: is the rate at which the value of a currency is falling and, consequently, the general level of prices for goods and services is rising.
How Its Measured: Consumer Price Index (CPI), which measures the percentage change in the price of a basket of goods and services consumed by households.
