Instructional Area: Economics – Flashcards

Goods are tangible (such as tires), services are intangible (such as an oil change). Services tend to require some degree of interaction with the customer, while goods are generally produced in a facility separate to the customer. The ownership of goods are transferable, but there is no ownership involved in services Product can be used to describe both goods and services

factors of production - means through which goods/services made available natural resources: materials from Earth (soil, iron ore, gold, oil, fish) human resources: labour - people who work to create goods, services capital resources: buildings, equipment, tools, trucks, factories (long-term investment)

economics: study of individual, household, organizational behaviour in resource management, how people act within markets to get what they want and accomplish goals two types: Macroeconomics, and microeconomics Microeconomics focuses on the actions of individuals and industries, like the dynamics between buyers and sellers, borrowers and lenders. macro takes a much broader view by analyzing the economic activity of an entire country, or the international marketplace economic activity: actions involving production, distribution, consumption Primary = Extracting Raw materials, Farming, etc Secondary = Engineering, Manufacturing, etc Tertiary = Services line banking, lawyers, hairdressers, etc quaternary sector = develpoing, selling and imporving information.

economic utility: ability of good or service to satisfy consumer needs/wants (value) form utility - changing raw materials/assembling parts to make them more useful time utility - having product available at time of year/convenient time of day place utility - placing product where it can be purchased information utility - communication with consumer (marketing) possession utility - exchange of product for monetary value (purchase - payment methods)

demand=quantity of product or service desired at a certain price supply=quantity suppliers are willing to provide at a certain price law of demand=the higher the price of the good, the less demand, the lower the price, the more demand law of supply=the higher the price, the higher the supply Equilibrium when these two functions intersects, the economy can be said to be in a state of equilibrium, where the amount of goods supplied is the same as the am mount demanded satisfies customers, businesses and countries, allows businesses to see all they have produced and consumers to receive what they want

signalling function: prices rise/fall to indicate scarcities/surpluses (e.g. signals to expand production) transmission of preferences: changing nature of needs and wants rationing function: willingness and ability to pay

supplying goods, services that consumers cannot obtain themselves creating jobs in the economy; investing in technologies and human resource skills, helping expand the skill set and abilities of people, through investment and training contributing back to the community

operations: activities involved in manufacturing/servicing (inputs into outputs) marketing: understanding needs and desires of consumers, distribution channels, selecting proper form of promotion, analyzing message, audience eg demo psycho, cost, distribution channel finance: forecast ability to meet future challenges, managing finances of a buisiness

traditional: following long-established patterns (not dynamic, do not change) o behaviours predictable; community interests take precedence (e.g. aborigines, tribes), based on traditional economic activities such as hunting, fishing, farming, prevalent in emerging or third world countries command: government controls economy - decides how to use/distribute resources (e.g. socialism), eg socialist states cuba etc, states from the past market: economic decisions made by individuals (investing personal resources), eg capitalist usa mixed: elements of command and market economies, eg china with state owned but also private owned

property and investments not owned by government controlled by individuals for profits or other private benefits

competition (regulation of monopolies); demand; economic conditions; marketing; costs

risk: chance of harm or loss (pure - no opportunity for gain; speculative - possibility of gain) human (e.g. negligence), natural (e.g. hurricane) and economic (e.g. loss of wages) risk rate and state of growth; competition; market growth

rivalry in which sellers try to get what other sellers are seeking (sales, profit, market share) determined by price, quality, service - balances demand and supply

Both are interrelated and interdependent on each other Businesses are the driving forces of the economy, and as such to maintain a steady and upward economic group the government must create a suitable environment for them. For a smooth, and even playing field. Gov want economic stability and growth, businesses want profit Both often try to influence and persuade each other, a balanced relationship is essential Business: Lobbying(trying to influence decisions made by officials in gov, legislators, members of regulatory agencies) , Trade unions and chambers of commerce, which work to find the common issues of organizations and present reports, holds dialogue to discuss on them with government bodies, PAC(political action committee) special organizations formed to solicit and distribute money to political candidates whose views favour them, Large investment, eg in developing countries http://edu-article.blogspot.com/2012/12/government-and-business-organizations.html#ixzz3Qq5QLQk3 Follow us: @eduarticle on Twitter | eduarticles on Facebook Gov:regulating competition, accountability; distributing information,special agencies, eg us FDA, creates, implement and monitors laws for their specific caterogry tax incentives for those who follow, eg for changing factories to more sustainable ones economic stabilization and growth (fiscal - spending/taxation and monetary - credit, money supply)

ratio of outputs to inputs in production - average measure of efficiency of person, machine, factory, system in converting inputs into useful outputs Calculated by dividing average output per period by the total costs incurred or resources ( capital, energy, material, personnel) consumed in that period