Economics & Business

Scarcity

The basic economic problem arising from limited resources meeting unlimited human wants.

Interdependence

Mutual reliance between individuals, businesses, and countries, highlighting the impact of one entity's actions on others.

Allocation

The process of distributing available resources among various uses to maximize benefits.

Markets

Platforms through which buyers and sellers interact to exchange goods and services.

Economic Performance

Measured by indicators like GDP growth, employment rates, and inflation.

Living Standards

The quality of life and wealth of individuals in a society, influenced by economic performance.

Specialisation

When individuals or nations focus on specific goods or services, increasing efficiency and productivity.

Trade

The exchange of specialized products that benefits all parties involved.

Opportunity Cost

The value of the next best alternative that is forgone when making a decision.

Households

Owners of resources and buyers demanding goods and services.

Firms

Users of resources that produce goods and services.

Government Sector

The part of the economy comprising government spending to fulfill collective wants for society.

Taxation

A leakage that reduces the flow of money in the economy, which can be GST or income tax.

Government Spending

An injection that increases the flow of money between households and firms.

Financial Sector

Encompasses savings and investment loans that influence the flow of money in the economy.

Imports

Goods and services purchased from overseas, representing a leakage from the economy.

Exports

Goods and services sold to other countries, injecting income into the economy.

Retail Market

Where goods are sold to consumers in shops and online.

Labour Market

Where workers sell their labour to employers.

Stock Market

Where shares in companies are bought and sold.

Housing Market

Where houses are bought, sold or leased.

Foreign Exchange Market

The largest market where different currencies are traded.

Equilibrium

The point where supply and demand curves intersect.

Equilibrium Price

The specific price at which supply equals demand.

Equilibrium Quantity

The specific quantity at which demand and supply intersect.

Clearing Price

Another term for the equilibrium price, where the market is cleared of surplus or shortage.

Ceteris Paribus

A Latin term meaning 'all other things being equal,' used to analyze the effect of one variable change.

Surplus

Occurs when the market price is too high and there is greater supply than demand.

Shortage

Occurs when the market price is below equilibrium, leading to more demand than supply.

Movement Along the Curve

A change in demand or supply due to a change in the price of the good or service.

Shift of the Curve

Occurs due to changes in demand or supply caused by factors other than the price of the good or service.

Rightward Shift

Represents an increase in demand or supply.

Leftward Shift

Represents a decrease in demand or supply.

Changes in Consumer Income

A non-price factor affecting shifts in demand.

Technological Advancements

A non-price factor affecting shifts in supply.

Preferences of Consumers

A non-price factor influencing demand.

Production Costs

A non-price factor that affects supply.

Trade

The buying, selling, or exchanging of goods and services between entities.

GDP

The market value of all final goods and services produced in an economy per year.

Free Trade Agreements (FTAs)

Treaties between countries to reduce barriers to trade and investment.

Protectionist Policies

Measures taken to protect local markets from cheaper imports.

Australian Tax Office (ATO)

Responsible for the administration of the tax system in Australia.

Income Tax

Tax paid by individuals and companies based on earnings.

Subsidies

Financial assistance provided by the government for the production and consumption of socially beneficial goods.

Company Tax

A fee businesses payto the government based on profit.

Goods and Service Tax (GST)

A 10% tax on most goods and services sold in Australia.

Technological Change

Modifications in job processes due to technological advancements.

Outsourcing Labour

Using outside suppliers for goods and services, often to reduce costs.

Social Engagement

The human desire to contribute to society through work.

Fulfil Needs and Wants

The motivation behind individuals seeking meaningful employment.

Investment Loans

Funds provided to firms to purchase equipment and expand their business.

Income Tax Payments

Regular tax contributions made by employees and business owners based on earnings.

Financial Sector Savings

The portion of household income that is not spent on goods and services.

Tax Leakage

Tax that reduces the flow of money between households and firms.

Market Regulation

Government measures to ensure fair market operations.

Government Business Enterprises

Businesses operated by the government to provide goods and services.

Circular Flow Model

An economic model demonstrating the flow of money, goods, and services between sectors.

Consumer Preferences

The tastes and choices that influence market demand.

Market Imbalances

Situations such as surplus and shortage that disrupt equilibrium.