Free SACE Year 11 Economics Flashcard Review
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What is relative scarcity?
Available resources cannot satisfy all competing wants.
How does absence differ from scarcity?
Absence means none is available; scarcity can exist with positive quantities.
Why allocate resources?
Competing wants cannot all be met with limited resources.
What is productive efficiency?
Using inputs to obtain maximum feasible output at specified quality.
What is opportunity cost?
Value of the next best alternative forgone.
What influences consumer choices?
Income, prices, time, preferences and information.
What can influence firm choices?
Costs, competition, capacity, expected returns and objectives.
What can influence government choices?
Budgets, social objectives, evidence and competing public needs.
What is an unintended consequence?
An effect that was not the decision’s objective.
What makes an inquiry focused?
A defined decision, population, period and criteria.
Why combine data types?
Counts reveal patterns; qualitative responses help explain experiences and barriers.
Why state model assumptions?
They clarify when the proposed causal relationship may hold.
What does price rationing mean?
Available output goes to buyers willing and able to pay the price.
How do final goods influence resource markets?
Higher demand for output can raise derived demand for labour, equipment and other inputs.
Define market equilibrium.
Quantity demanded equals quantity supplied at the prevailing price.
What creates a shortage?
Quantity demanded exceeds quantity supplied at the current price.
What creates a surplus?
Quantity supplied exceeds quantity demanded at the current price.
Why do relative prices matter?
They change incentives to consume and produce one item compared with alternatives.
What causes a movement along demand?
A change in the product’s own price, holding other influences constant.
Name two demand shifters.
Income and tastes; population and related-product prices can also shift demand.