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Economics, Economic Systems, Consumers and Producers, Circular flow model/…
Economics
Financial sectors:
Financial intermediaries, such as banks and credit unions make up what we sometimes call the financial sector of the economy
Government sector:
The federal, state and local governments are also involved in the market
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Overseas sector:
Australia is an open economy, which means we trade with other countries
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Businesses in economics is the integration of economic theory with business practice for the purpose of facilitating decision making and forward planning by management.
Sole trader:
A sole trader is an individual running businesses. It is the simplest and cheapest business structure. If you operate your business as a sole trader, you are the only owner and you control and manage the business.
Partnership:
A partnership consists of two or more persons or entities doing business together, there are three main types of partnership; general, limited, and limited liability
general:
A general partnership is an agreement between partners to establish and run a business together. It is one of the most common legal entities to form a business. All partners in a general partnership are responsible for the business and are subject to unlimited liability for business debts.
Limited:
A limited partnership exists when two or more partners go into business together, but one or more of the partners are only liable up to the amount of their investment.
limited liability:
A limited liability partnership is a legal business structure that is a combination of a standard partnership and a limited company. An LLP (Limited liability partnership) has at least two members where each member has limited liability, meaning that there is less of a financial risk than other business structures.
Corporation:
A corporation is a legal form of business that is separate from its owners, or you could say that its a business that is a separate legal entity from its shareholders.
Franchise:
Franchising is a business model, that allows a business to operate under the brand of another business. A franchisee is a sole trader, partnership or company who enters into the an agreement with a franchisor to sell their products or services for a specified period of time.
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Markets consist of producers, who make and sell the goods and services, and consumers, who buy the goods and services.
Producers rely on consumers to buy from them, and consumers rely on producers to provide the goods & services they want.
Consumers and Producers are at the center of Australia's market system.
When we are working we are providing our labor to contribute to the process of producing goods or services for another consumer to buy.
Market:
A market refers to the relationship between the buyer and sellers, rather than to any physical location.
The total of all consumers in the economy is sometimes called the household actor. The total of all producers is sometimes known as the business sector.
Economic systems:
Descries how a countries economy is organized.
because of the of problem scarcity, every country needs a system to determine how to use its productive resources.
4 types of economic systems:
- Traditional
- Command economy
- Market economy
- Mixed economy (most countries are a mixed economy
Traditional economy:
An economic system in which economic decisions are based on customs and beliefs.
People will make what they always made and will do the same work as their parents.
Exchange of goods is done through barter: trading without using money.
Command economy:
A command economy is a key aspect of a political system in which a central governmental authority dictates the levels of production that are permissible and the prices that may be charged for goods and services.
Market economy:
A market economy is an economic system in which economic decisions and the pricing of goods and services are guided solely by the aggregate interactions of a countries individual citizens and the businesses
Mixed economy:
A mixed economy is a system that combines characteristics of market, command, and traditional economies. It benefits from the advantages of all three while also experiencing some of the disadvantages.
- What to produce
- How to produce
- For whom to produce
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