Economics is a social study that studies how society allocates its limited resources to satisfy its unlimited needs and wants. We are a capitalist consumer driven society and so businesses or producers are choosing things that will maximize their proﬁt. These things must have a demand from the consumer who chooses things to maximize their utility. Economics is known as a social science. Science: because of all of the scientiﬁc methods used (e.g. tables, graphs and hypothesis) and Social: because it is about people who are ever changing. Unlike physical and chemical science the nature of a social science makes the establishment of principles harder. Human beings are unpredictable – Iron has constant properties, people don’t. For example: The ‘Law of Demand’: the lower the price the higher the demand. Sometimes it doesn’t work this way as consumers equate low prices with poor products or poor service and therefore don’t buy it. With unlimited needs and wants and only limited resources we are forced to choose what will give us greater utility. Because the quality and/or quantity of resources is limited, our capacity to produce is restricted, as is our ability to satisfy the needs and wants of society. Is the satisfaction that someone gets from something (Factors of production) are productive inputs that are required by businesses to make goods or services. Are essential for the sustenance of life i.e. food, water, clothing, shelter and companionship. Are not essential for the sustenance of life. They are unlimited because they are recurring (you may want a coke today and also want one tomorrow), they are changeable (subject to fashion, technology, and weather), they are complementary ( a car can only run with petrol) and also because tastes and preferences change over time as you get older and mature.
Utility Resources Needs Wants
Economics Test Revision! ! Word / Phrase 5 Sectors of the Economy and Their Wants
Meaning 1. House Holds / Consumers - personal wants 2. Businesses - a good market share and skilled labour 3. Government - want to be seen as running the country/state well because they want to be re-elected. They want to be seen as providing us with low unemployment, high economic growth, external balance and inﬂation. 4. Trade and Exports - we ant other countries to demand our goods and services and we want them to provide us the things that we need. 5. Finance and Banking - want us to intrust money with them giving us a percentage of interest on the amount that we hold with them in exchange. They then invest in our money, loaning it out to people who then have to pay a higher percentage of interest to the bank. 1. Land - We are the owners of the land (school) 2. Labour - human effort used in the production process (teachers) 3. Capital - anything made by someone to be used as a good or a service (student) 4. Enterprise - Organization (principal) Represents the natural or God given gifts, these include; arable(farming), oil, minerals, rivers, climate, forests and oceans. These resources, which are given from the land or are apart of the land, have the potential to support a variety of primary (mining and agriculture), secondary (businesses) and tertiary (service) industries. Australia is well endowed with natural resources and has an intensive horticulture and agriculture.Land can be increased by re-claiming land or combining it with technology to make it productive. New discoveries of iron ore or gold increases our quantity of land. In crease the quality and quantity of land by exploration and research and development. Skilled and unskilled labour provides physical power, mental talents as well as specialized services used in the production precess. Males mainly ﬁnd work in construction and manufacturing as well as retail and trade. Women mainly ﬁnd work in health and community services and retail and trade. Labour can be improved via...
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