LESSON 15.7 Review 15.7.1
Key knowledge summary Use this dot-point summary to review the content covered in this topic. 15.2 Economics and Business concepts and skills
• Resource allocation and decision-making involves the idea of ‘scarcity’. Scarcity is the ‘basic economic problem’, and this involves society having limited resources available to satisfy unlimited needs and wants. • The four main types of economic resources are land, labour, capital and enterprise. • Every choice made involves an opportunity cost, which is the next best alternative given up whenever a choice is made. • All economies must make decisions about how resources will be allocated among producers and what types of goods and services will be produced. This means economies must answer the three economic questions: what to produce? How to produce? And for whom to produce? • Australia is a market capitalist economy, which means that most answers to the three economic questions are made by the market (where buyers and sellers negotiate prices for goods and services). • The four Economics and Business skills that you will develop throughout your course are: • Questioning and researching: This involves posing statements that require answers, particularly in regard to what is known and what is not known, in order to improve your knowledge. Research is important because it allows you to ýnd out what is unknown and contributes to ýlling in gaps in your knowledge. • Interpreting and analysing: This involves interpreting information to identify the main features or ideas, and then examining the information closely to determine how the parts relate to the whole. • Evaluating, concluding and decision-making: This involves proposing explanations for events or issues and making overall judgements based on the evidence. • Communicating: This involves presenting ýndings or representing information using an appropriate format to suit a particular audience. The appropriate use of economics terminology and business terminology is very important in this. 15.7.2 Key terms business any activity conducted by an individual or individuals to produce and sell goods and services to make a proýt economic system a way of organising the production and distribution of the nation’s goods, services and incomes economics a social science (study of human behaviour) that analyses the decisions made by individuals, businesses and governments about how limited resources are used to satisfy society’s unlimited needs and wants entrepreneur a person who takes on a risk by starting a business with an idea, hoping to make a proýt through initiative and enterprise franchise a business that gives the right to another person or business to sell goods or services using its name market where goods, services or resources are exchanged between buyers and sellers needs goods or services that consumers consider necessary to maintain their standard of living opportunity cost the next best alternative given up whenever a choice is made resource allocation decisions about how scarce resources are distributed among producers, and which types of goods and services will be produced to satisfy wants and needs resources items of value that we use to produce goods and services to satisfy needs and wants, which include land, labour, capital and enterprise
TOPIC15 Economics and Business concepts and skills 541
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