Economics & Business Test

What is the economic definition of a 'market'?

Any place where buyers and sellers come together to exchange goods and services.

What is an example of a physical market?

A shopping centre or a fruit market.

What is an example of a virtual market?

An online store such as Amazon or eBay.

What is an example of a global market?

An international stock exchange.

Term: Goods

Definition: Physical items that can be touched, such as food or phones.

Term: Services

Definition: Intangible actions performed for others, such as teaching or hairdressing.

In economics, who are the 'consumers'?

The people who buy goods and services.

In economics, who are the 'producers'?

The people or businesses that make or provide goods and services.

What does the term 'resources' refer to in production?

The inputs used to produce goods and services, such as land and labour.

What is the definition of 'scarcity'?

The condition of having unlimited wants but limited resources to satisfy them.

What is 'opportunity cost'?

The value of the next best alternative given up when making a choice.

In a market, what does 'demand' represent?

How much consumers want and can afford to buy at a given price.

In a market, what does 'supply' represent?

How much of a product producers are willing and able to sell.

What is the definition of 'price'?

The amount of money exchanged for a good or service.

What does 'allocation' mean in an economic context?

How resources are distributed among different uses, such as government spending.

According to the Law of Demand, what happens to quantity demanded as price increases?

The quantity demanded decreases.

How does an increase in consumer income typically affect demand?

Demand increases because people have more money to spend.

How do 'tastes and preferences' affect market demand?

Changes in trends or fads can cause demand for a specific product to rise or fall.

If the price of a substitute good (like Coke) increases, what happens to the demand for its alternative (like Pepsi)?

The demand for the alternative good increases.

According to the Law of Supply, what happens to quantity supplied as price increases?

The quantity supplied increases because producers want to earn more profit.

How does a rise in the cost of production (e.g., higher wages) affect supply?

Supply decreases because it is more expensive to produce the goods.

What effect does a technology improvement generally have on supply?

Supply increases as production becomes more efficient.

What is 'equilibrium price'?

The market price where the quantity supplied exactly equals the quantity demanded.

What market condition occurs when the price is set above the equilibrium level?

A surplus occurs because supply exceeds demand.

What market condition occurs when the price is set below the equilibrium level?

A shortage occurs because demand exceeds supply.

What are the four factors of production?

Land, labour, capital, and enterprise.

What is the economic 'reward' for the factor of production known as Land?

Rent.

What is the economic 'reward' for the factor of production known as Labour?

Wages or salary.

What is the economic 'reward' for the factor of production known as Capital?

Interest.

What is the economic 'reward' for the factor of production known as Enterprise?

Profit.

What does the factor of production 'Capital' include?

The tools, machinery, and buildings used to produce goods and services.

What is the role of an 'entrepreneur' in the factor of production called Enterprise?

They take risks and organise the other three factors of production.

How do markets use prices to allocate resources?

High demand leads to higher prices, which signals producers to move resources into that product.

What is 'market failure'?

A situation where the market does not allocate resources efficiently.

What is an example of a negative externality?

Pollution resulting from factory production.

What is a 'public good' in the context of market failure?

A service like a park or road that individuals are generally unwilling to pay for privately.

What type of business is owned and run by a single person?

A sole trader.

What is the typical size range of owners in a business partnership?

Between 2 and 20 people.

How is a Private Company (Pty Ltd) different from a Public Company (Ltd)?

A private company is owned by shareholders but not listed on the stock exchange.

Where are the shares of an Australian Public Company (Ltd) sold?

On the Australian Securities Exchange (ASX).

What is 'product differentiation'?

The process of making a product unique to stand out from competitors.

What is 'globalisation' in a business context?

Selling products overseas or using suppliers from other countries.

What does the term 'gig economy' refer to?

A labour market characterised by short-term contracts or freelance work, such as Uber or Airtasker.

What is the primary impact of 'automation' on the workforce?

The replacement of human labour with machines or AI, particularly in repetitive tasks.

List three essential skills for the modern work environment.

Communication, teamwork, and digital literacy.

What is the primary purpose of taxation?

To fund public services such as roads, schools, hospitals, and defence.

What is 'Income Tax'?

A percentage of earnings paid to the government by individuals.

What is the standard rate of GST in Australia?

10%.

On which specific products is 'Excise Duty' applied?

Petrol, alcohol, and tobacco.

What is 'Capital Gains Tax'?

A tax on the profit made from selling assets such as houses or shares.

What is 'Stamp Duty'?

A tax paid when buying property or transferring ownership.

What defines a 'progressive' taxation system?

A system where the tax rate increases as the individual's income increases.

What is the 'tax-free threshold' for individuals in the 2024-25 financial year?

The first $18,200 earned is taxed at 0%.

How can high company tax rates affect business decision-making?

They can reduce profits, leading to less investment or expansion.

What is the difference between a 'need' and a 'want'?

Needs are essential for survival (e.g., water), while wants are things we desire but do not need to survive (e.g., a gaming console).

Term: Substitute Good

Definition: A good that can be used in place of another, such as butter and margarine.

Term: Complementary Good

Definition: A good that is used together with another good, such as a printer and ink cartridges.

What are the '4 Ps' of marketing?

Product, Price, Place, and Promotion.

In marketing, what does 'Place' refer to?

Where and how the product reaches the customer, such as in shops or online.

In marketing, what does 'Promotion' refer to?

How customers find out about the product through advertising, social media, or offers.

What is one strategy Australians can use to support the 'War on Waste'?

Banning disposable coffee cups or using paper bags in supermarkets.

In the context of the Australian tax system, what does 'ATO' stand for?

Australian Taxation Office.

In the context of the Australian tax system, what does 'TFN' stand for?

Tax File Number.

In the context of the Australian tax system, what does 'PAYG' stand for?

Pay As You Go.

Using the 2026-27 rates, how much tax does Sarah pay on an income of $50,000?

$5,520 (calculated as $4,020 + 30c for every

11

1

over $45,000).

How does 'automation' benefit a business like Gather By Manuka?

It reduces manual labour costs and improves productivity through technology like hive-monitoring.

What innovative farming method is used by Pundi Produce to grow native foods?

Aquaponics.

What are two economic benefits of businesses like Pundi Produce for the local Aboriginal community?

Job creation and the provision of work experience programs for young people.

Why might a rise in fuel prices negatively affect a small business offering home deliveries?

It increases the cost of production (delivery expenses), which can reduce overall profit.

How does Pundi Produce combine traditional knowledge with modern business?

It uses Indigenous knowledge of native plant medicinal values to market modern products like cocktail bitters.

What is a 'marginal tax rate'?

The percentage of tax applied only to the income within a specific tax bracket.

Why does the Federal Government apply higher tax rates to higher income earners?

To redistribute wealth and ensure that those with a greater capacity to pay contribute more to public services.

In a supply and demand graph, what is represented by a movement along the curve?

A change in quantity resulting from a change in the price of the product.

In a supply and demand graph, what is represented by a shift of the entire curve?

A change in a non-price factor, such as consumer income or production technology.

How does 'aquaponics' differ from traditional agriculture in terms of resource use?

It uses significantly less water, land, and labour.

What is the main challenge for Gather By Manuka when trying to scale its business?

Maintaining strict quality standards and a premium reputation while facing competition from New Zealand.

What is one example of how businesses respond to 'consumer trends'?

Providing plant-based foods or sustainable packaging to meet changing preferences.

According to the 2026-27 tax table, what is the tax rate for income between $135,001 and $190,000?

37%.

What is an 'agribusiness'?

A business that operates in the agricultural industry, such as Gather By Manuka.

What is the 'What-Why-Example' formula for answering exam questions?

State what the concept is, explain why it happens, and provide a concrete example.

What happens to the supply of a crop if a natural event like a flood occurs?

The supply decreases.

Why is 'digital literacy' considered a crucial skill for the future of work?

Because many jobs are becoming automated or require the use of complex data and software.

What is a 'monopoly'?

A type of market failure where a single company controls the entire supply of a good or service.How does globalisation affect the 'workforce' specifically?