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Economics Term 1 Year 11
Knowledge test
48
Economics
11th Grade
03/11/2012

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Cards

Term

 

 

Elasticity 

Definition

Reflective amount that one variable change given change in another variable 

Term



Elastic 

Definition

the percent change in qty. demanded exceeds the percent change in price (10% rise in $ leeds to a 20% fall demanded)

Term

 

 

Inelastic 

Definition

percent change in qty. demanded is LESS then %change in $ ( 10% change in %= 5% change in demand)

Term

 

Unit Elastic

Definition

%change $= %change in demand ( vegitables, breakfast cerals...)

Term

 

Price Elasticity Eqn

Definition

Change in qty/qty OVER change in P/p

Term

 

Collective Wants 

Definition
When a group of people all want the same rescource ( village wanting water, economics class wanting eco book...) 
Term

 

Intervention in Price Mechanism (Gov)

Definition

Subsides- gov services which private enterprise doesn't want to pay for ( public transport- doesn't turn a profit

 

Term
Externalities 
Definition
indirect costs+benefits associated with the production +consumption of certain g+s that market fails to account for ( Neg. public transport- Pos- Airport)
Term
Consumer Price Index
Definition
deciding or choosing hwo to satisfy unlimited wants with limited rescources 
Term
Deregulation
Definition
where Gov reduces level of intervention in MP ex. sells assests ( telstra, Qantas, hospitals, prisons)
Term
Economic Indicators 
Definition
Eco. variables whose patterns of fluctuation portray, in a resonably consistant and predictable way, the general course+level of aggregate eco. activity ( employment levels, inflation and eco. growth)
Term
Price Mechanism 
Definition
System or process by which price changes bring about equality between S+D
Term
Equilibrium 
Definition
situation in circular flow where injections = leakages causing output, income, expenditure , employment to remai unchanged; balanced ( where s=d in a market)
Term
What is ment by Net Present Value
Definition
the present value of the current benefits+discounted future benefits less the present value of the current costs + discounted future costs of a project ( value- benefits)
Term
Propensity
Definition
term used to described a persons tendancy or desire to acat in a certain wau; potential investors may make an informed decision 
Term
Utlity 
Definition
Satisfaction gained by the purchase of G+S ( me buying shoes!)
Term
Price Ceiling 
Definition
price fixed by the govenrment at a lower rate then that that would be achieved in a free market enterprise ( established by the free operations of the price mechanism)
Term
Price Floor
Definition
price fixed by the government that is HIGHER then that that would be established through the free-market operations by the price mechanism 
Term
Wages 
Definition
on the hourly rate- paid mainly to blue collar workers 
Term
Salary
Definition
fixed amount for the yr. intellectual workers ( white collar) more permident 
Term
leakages 
Definition
income that leaves the circular flow- outflow if expenditure ( savings, income tax, imports)
Term
Interjections
Definition
investment expenditure ( company building factory) gov. expenditure ( hospitals and exports)
Term
C+I+G+X-M
Definition
Consumptions+Income+Government+Exports- Imports
Term
Factors determaining demand
Definition
price of a commodity, buyers income, buyers tastes, population changem buyers expectations for the future
Term
Disposable Income
Definition
Part of the income that is subject to change or removal ( travel, food, clothing)
Term
factors determaing Supply
Definition
$ of a commodity, $ of production, technology used in production, effects of naturem future expectations of suppliers 
Term
List some advantages of the CBA
Definition
Ad= wider social+environmental impacts of a project or policy can be incorperated into the analysis. Time, Ranking: allows options to be ranked by their benefits
Term
List some disadvantages of the CBA
Definition
Identifying every player effected. Attaching valuations to C+B that are accurate. Maximising equality
Term
Intervention in the Price Mechanism 
Definition
sucsessful G+S launched into MP- suppliers take advantage of the MP ( Iphone- Samsung copy)
Term
Monopoly
Definition
1 producer/supplier domanating the market 
Term
Duopoly
Definition
two producers/ suppliers dominating the market ( coles/woolworths) opposite of perfect competition 
Term
ACCC
Definition
Australian Competition + consumer comission ( ensures competition in Aus Market
Term
Government Taxation 
Definition
personal income, company tax, GST
Term
Colluding
Definition
when 2 producers/suppliers set a fixed price tp stamp out competion- ILLEGAL
Term
Why is a CBA so valuable to economists+ the business world?
Definition
allows business+ people to weigh the C+B of producing something. an educated decision can then be made
Term
The Price Mechanism 
Definition
the linking of eco. sections ( adam smith- invisible hand)
Term
Law of Supply
Definition
Qty. demanded of G+S is INVERSE to the price of G+S
Term
Law of demand
Definition
qty supplied of G+S varies proportionally with the G+S
Term
Law of supply and demand
Definition
qty of a commidity that will be purchased in a market over a given time and at a given price
Term
The Economic Problem
Definition
what to produce ( G+S) how to produce (labor/capitol/enterprise/land) For whom to produce (consumers) how much to produce ( supply+ demand)
Term
Consumer Sovereignty
Definition
the consumer is "king" of MP because con. decides on the economic problem through their purchasing habits. They determain th pattern of production
Term
The Marketplace Enterprise Economy
Definition
capitalist market- ownership of private property, use of market pricing, varying levels of gov. control. Self intrest for motivation for work
Term
Competitive Wants
Definition
Something that is easily substituted by another commodity 
Term
complimentary wants
Definition
wants that go together ( house/ furniture/plants... car/gas)
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