Card Set Information
Yr 10 Bus Notes
How individuals try to satisfy unlimited wants, using scarce resources
Opportunity cost is what?
Opportunity cost is the next best choice
What are the three factors of production?
Land, labour and capital (NB fourth may be entrepreneurship)
Define and give an example for land
All resources which are provided from nature, soil trees etc
Define and give an example for labour (human resources)
The effort by people in the production process, builder
Define and give an example for capital
Man made resources that are used to produce other goods and services eg machines, tools
People who take risks, invent products and start up new businesses
Draw a circular flow model.
When two or more people and/or groups have a mutual reliance on each other
What is the factor reward for Land?
What is the factor reward for labour?
What is the factor reward for entrepreneurship?
What is the factor reward for Capital?
When a business focuses on producing one type of good or service
Define division of labour
When the production of one good or service is split into separate tasks.
Demand is the willingness and ability of the consumer to purchase a good or service at a range of prices
Draw up a demand schedule
Answer in book
Draw a demand curve for previous schedule
In book and on schedule
What is ceteris paribus?
Assuming all things other than price stay the same
What is the law of demand
As price increases, quantity decreases
Changes to quantity demanded cause and are caused by what
Is caused by a change in price and causes a movement along the demand curve
What happens and what causes a change in demand?
Causes a shift of the demand curve, caused by any factor except the price
What are some examples that change demand?
+ is advertising, popularity
- is bad publicity, unpopular
Define a complementary good
A good that can be used with another
Define a substitute good
A good that can be used in place of another
What is market demand
The horizontal summation of all individual demand schedules
The quantity of a good or service that a producer is willing and able to provide to the Market at a range of prices
What is the law of supply?
As the price increases, the quantity increases, ceteris paribus
Draw a supply schedule
Draw a supply curve
T or F: the change in price of a good or service leads to a movement along the supply curve?
A change in what leads to a shift of the supply curve?
Costs of production
A place or situation where buyers meet to exchange goods and services
What is equilibrium
The point where the Market supply and the Market demand curves intersect. Occurs when both buyers and sellers agree on the same price and quantity
What happens if the seller decides to set the price above equilibrium?
There won't be enough demand to match the quantity the sellers provide. Leads to excess supply or surplus
What happens if the seller decides to set the price below equilibrium?
There will be too much demand for the quantity the sellers will provide. Leads to excess demand or shortage