HASS

The Economic Problem

The challenge of unlimited needs and wants in the face of limited resources. Example: A society must choose between funding education or healthcare due to limited government budgets.

Scarcity

The idea that resources are limited while human wants are unlimited. Example: Freshwater scarcity in many regions due to overuse and pollution.

Factors of Production

The resources used to produce goods and services, including land, labor, capital, and entrepreneurship. Example: A farmer (labor) using a tractor (capital) on his land (land) to grow crops.

Land (Factors of Production)

All natural resources used to produce goods and services, such as land, water, forests, and minerals. Example: A forest providing timber for construction.

Labor (Factors of Production)

The human effort used in the production of goods and services. Example: Workers assembling cars in a factory.

Capital (Factors of Production)

The equipment and structures used to produce goods and services. Example: Machinery used in a chocolate factory.

Entrepreneurship (Factors of Production)

The ability to combine land, labor, and capital to create new businesses and products. Example: A tech entrepreneur starting a software company.

Increase Supply Factors

Factors that can lead to an increase in supply, including lower input prices, more suppliers, improved technology, and government subsidies. Example: A government subsidy that reduces the cost of solar panels, encouraging more companies to produce them.

Decrease Supply Factors

Factors that can lead to a decrease in supply, including higher input prices, fewer suppliers, less efficient technology, and regulatory burdens. Example: An increase in steel prices that forces some manufacturers to cut production.

Increase Demand Factors

Factors that can lead to an increase in demand, including lower prices, higher incomes, positive tastes and preferences, and expectations of future price increases. Example: A new scientific study highlighting the health benefits of a cereal increases its sales.

Decrease Demand Factors

Factors that can lead to a decrease in demand, including higher prices, lower incomes, negative tastes and preferences, and expectations of future price decreases. Example: A popular fast-food chain raises prices, causing customers to buy less.

Complementary Goods

Goods that are used together, such that the demand for one is linked to the demand for the other, such as printers and ink cartridges. Example: Hot dogs and hot dog buns as they are often purchased together at barbecues.

Substitute Goods

Goods that can replace each other, such that an increase in the price of one leads to an increase in the demand for the other, such as butter and margarine. Example: If the price of coffee rises significantly, tea may see an increase in demand.

Shortage

A situation where demand exceeds supply, often leading to higher prices. Example: A hurricane creates a shortage of bottled water as demand spikes.

Surplus

A situation where supply exceeds demand, often leading to lower prices. Example: A farmer harvests an exceptionally large crop of apples leading to prices falling.

Equilibrium Price

The price at which the quantity demanded equals the quantity supplied in a market. Example: The price of concert tickets where the number of buyers meets the number of tickets available.

Role of Government in the Economy

Includes protecting consumers, redistributing income, managing economic growth, and planning for environmental sustainability. Example: The government enacting regulations to limit pollution from factories.

Major Sectors of Revenue

The main sources of government revenue, including income tax, GST, and other taxes. Example: Income tax collected from individuals as a major source of revenue for the government.

Welfare (Government Expenditure)

Payments provided by the government to individuals who are unemployed, ill, or elderly. Example: Unemployment benefits provided to those who have lost their jobs.

Sole Trader

A business structure owned and operated by one person, characterized by full control but unlimited liability. Example: A local bakery owned and run by a single individual.

Partnership

A business structure owned by two or more people that shares workload and profits, but has unlimited liability. Example: A law firm owned by a group of lawyers.

Corporation (Company)

A legal entity separate from its owners, providing limited liability but requiring complex setup and management. Example: A multinational corporation like Apple Inc.

Cooperative

A business model owned by members who share benefits and profits; democratic in decision-making. Example: A food cooperative where members buy shares and share profits.

Franchise

A business model where an individual licenses a brand and business operations from a franchisor. Example: McDonald's operating as a franchise with individual owners of