ECONOMICS 1st assess.docx

**ECONOMICS -- FIRST BOOKLET REVISION SHEET (11/9) Name:\ ** 1. *Relative scarcity-meaning*\ Relative scarcity mean where people's needs and wants are virtually unlimited and exceed the limited resources available to satisfy those wants 2. *Description of three productive resources*...

**ECONOMICS -- FIRST BOOKLET REVISION SHEET (11/9) Name:\ ** 1. *Relative scarcity-meaning*\ Relative scarcity mean where people's needs and wants are virtually unlimited and exceed the limited resources available to satisfy those wants 2. *Description of three productive resources* Natural resources (resources occur in nature), Labour resources (mental or physical effort provided by people during production process), Capital resources (manufactured or producer goods) 3. *What are the three basic economic questions?* What to produce, how to produce, who to produce it for? 4. *Explanation of how the household sector and the business sector interact*.\ Household sector provide labour, capital goods, lands in exchange for income from business sector 5. *Demand-meaning* Quantity of goods and services that buyers are willing and able to purchase at a given price 6. *Supply-meaning* Quantity of goods and services that producers are willing and able to supply at a particular price 7. *The law of demand -- full description* The higher the price, the lower total quantity demanded, and the lower the price, the higher total quantity demanded 8. *Ability to draw the demand curve\ * 9. *Expansion and a contraction of demand*\ Expansion (): lower price will result in a\ higher quantity of demand\ (movement going down)\ Contraction (Arrow Right outline): higher price will result in\ a lower quantity demanded\ (movement going up) 10. *Movement along the demand curve\ * 11. *The law of supply -- full description*\ The higher the price, the higher total quantity supplied, and the lower the price, the lower total quantity supplied 12. *Ability to draw the supply curve* 13. *Expansion and contraction in supply*\ Expansion (Arrow Right outline): higher price will result in\ a higher quantity supplied\ (movement going up)\ Contraction (): lower price will result in a\ lower quantity of supplied\ (movement going down) 14. *Movement along the supply curve\ * 15. *Market equilibrium*\ Market equilibrium occurs when the total quantity consumers demand is exactly same to the total quantity the producers are willing to supply 16. *Ability to identify in a graph the equilibrium point, the equilibrium price and the equilibrium quantity* *\ * 17. *Market shortage*\ Demand \> Supply, too little good or service compared with what consumers want to purchase. (price is too low, due to law of demand, demand quantity increase, but supply quantity decrease due to law of supply) 18. *How a market returns to equilibrium from a market shortage*\ Increase the price 19. *Market surplus*\ Supply \> Demand, too much good or service compared to what consumers want to purchase (price is too high, due to law of demand, demand quantity decrease, but supply quantity increase due to law of supply) 20. *How a market returns to equilibrium from a market surplus*\ Lower the price 21. *Ability to identify in a graph where a shortage and surplus occur\ * 22. *Ability to demonstrate in a graph how equilibrium in reached from a shortage and from a surplus Booklet page 22\ * 23. *Changes in the demand of a product due to non-price factors.* a. Outline of the non-price factors that affect the demand for goods and services\ Disposable income of the consumer, consumer tastes and fashion, the onset of summer or winter, prices of complementary items, prices of substitute items, population size. b. Graph the shift or the demand curve (to the left (a decrease in demand) and to the right (an increase in demand)) Booklet page 24 24. *Changes in the supply of a product due to non-price factors* a. Outline of non-price factors that affect the supply of goods and services.\ New technology, seasonal factors/climate conditions, production costs. b. Graph the shift of the supply curve (to the left (a decrease in supply) and to the right (an increase in supply)) Booklet page 28