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- 1Explain the concepts of scarcity, choice and opportunity cost and how they come into play when consumer choices are madeConsumers have limited resources and means (money, time, skills, etc) and because of this, we are unable to purchase all of our wants which creates scarcity. So, because of scarcity, consumers must make choices regarding what to spend their resources on. After having made a consumer choice there will always be an opportunity cost. This is the next best good or service which is being given up.
- 2What are resources?Resources are the things we have available to help us obtain our needs and wants
- 3What are means?Means are our personal resources of time, skills, and money including those of our family
All means are limited - 4Explain ScarcityThe concept of having unlimited wants and limited means
- 5What are needs and wantsNeeds: - Those things we must have to survive eg food and water
Wants: - Those things we would like but can survive without - 6Explain Conflict-Conflict is caused when one or more consumers have contradicting values or opinions which can cause disagreements or arguments regarding consumer choice
-When there is conflict a compromise must be made - 7What are values and how do they affect consumer choice-Values are the ideas and beliefs that a person, group or society consider to be important
-In economics, they are a non-price factor which affects consumer choices and can cause conflict
Eg. Fair dealing, honesty, integrity - 8List some of the factors which can affect values-Parents
-Upbringing
-Culture
-Education
-Religion
-Peers
-Media - 9What are consumer choicesEconomic decisions a consumer makes as a result of scarcity which incurs an opportunity cost
Consumer choices are influenced by the means a person has and their values - 10What is demandDemand corresponds with the quantity a person is both willing and able to buy at a range of prices
- 11What are flow on effectsFlow on effects are the change and adaptations made as a result of an earlier change in price of a good or the demand they have for a good or service
- 12What does TALL stand for and when can you use this acronymT-Title with a time frame
A-Axis
L-Labels
L-Line
This acronym help identify the required components of a demand curve and schedule - 13State the law of demandAs the price increases the quantity demanded will decrease, vice versa, ceteris paribus
- 14What causes a change in demandA change in price will cause a change in demand creating a shift along the demand curve
- 15How do non-price factors affect demandWhen non-price factors change, there will be a shift is demand which causes a shift of the entire demand curve
- 16List some non-price factors-Tastes and preferences
-Income
-Price of substitute good
-Price of a complementary good - 17What are normal goods?Necessities-- Goods which provide the items we need
-Luxuries--The type of items which are our wants
-Normal goods are those goods for which demand will increase as does a person's income - 18What are inferior goods?Inferior goods are goods for which demand falls as income increases
These types of goods typically are of poorer quality
As income rises consumers switch to better quality goods and normal goods - 19What are savingsLike spending on luxuries, savings tend to increase as household income rises as they have money left over from purchasing necessities and luxuries
- 20Explain income tax and disposable income-Income is what you get from working
-tax is then subtracted from that sum
-leaving the disposable income
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- Flashcards I used in preparation for the mock exams for business studies, 2017. The questions and answers were taken from a published workbook for NCEA economics
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- Tilly Surrey
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