14.02.

2023

Difference Between Needs & Wants

What is economics?
The branch of knowledge is concerned with the production, consumption, and transfer of wealth

Economic Definitions:

Needs Things essential for survival (basic needs)

Wants Things we want that aren’t essential for survival

Means Our personal resources are used to satisfy our needs & wants (skills, money/income, family)

Scarcity Occurs when our unlimited needs & wants are greater than our means to satisfy them with

Choice Decisions made from a list of alternatives

Opportunity cost* The next best alternative forgone when a decision is made

Value Values are our principles and beliefs that we believe are important

Conflict It arises over the values people hold and the choices individuals make

Compromise A compromise is a solution that satisfies both parties. It must also satisfy the values each
side holds.

Consumer Anyone who buys or uses goods or services

Consumer/ The number of goods or services an individual is willing and able to buy at a range of prices
Individual demand at a certain time

Demand schedule A table that contains a person’s demand information for a particular good or service over a
range of prices

Goods A good is something that can be stored, seen, transported, and counted. They are usually
tangible, e.g. books, burgers, shoes, etc…

Services A service is intangible. They cannot be seen, transported, or stored. It is when people do
things for the benefit of other people, e.g a haircut, uber ride, mail delivery, etc…

Cetris Paribus Is a Latin term that means ‘all other things remain the same.’
*There is only ever one opportunity cost
*Decisions affect the economy, influencing supply and demand

Needs: 3 basic needs

- Food & water
- Shelter
- Warmth/clothing

Question about choice/scarcity:

 - Define scarcity
- Explain limited means
- Make a choice
- Explain opportunity cost

Producers & consumers:

- A producer is any person or organization that uses resources to create goods and services
- Consumers are individuals or households that consume goods and services from businesses and firms

Goods & services:

- Goods are objects that have a physical presence. Goods can be subdivided into free or economic goods.
Free goods = Goods that are plentiful & have no cost
Economic goods = Goods that are scarce and therefore have a cost (economic goods can be subdivided into
consumer goods or capital (producer) goods)
- Consumer goods are goods for consumption by individuals or households for their own personal satisfaction
- Capital goods are man-made goods used in the production of other goods & services
- Services are what someone does for you, such as the work of a doctor or mechanic

20.02.2023

Values

What are values?

Values are the principles and beliefs that we consider to be important. Our values affect the decisions we make. E.g.
honesty, integrity, respect, religious views, family values, etc…

Our values have a significant impact on our decision-making. Our values affect the importance we give to the costs and
benefits when we are analyzing our options. We all have different values.

Organizational values:
Organizational values are a set of core beliefs held by an organization. They act as guiding principles that provide an
organization with purpose and direction and set the tone for its interactions with its customers, employees, and other
stakeholders.

21.02.2023

Statement True False Correction If False

1. Values are key principles or core beliefs T

2. An example of a value is laziness F

3. Our values affect our decision-making T

4. We are born with values F

5. We all have the same values F

 6. Values can conflict with each other T

Compromise:
A compromise is a solution that satisfies both parties. It must also satisfy the values each side holds.

When values are different then conflict can happen. E.g. you want to go to a party, but your parents are concerned for
your safety. Therefore a compromise is required.

Activity: Sweet 16
You want to go to your friend’s 16th birthday party on Saturday. However, the party finishes at midnight. Your
parents are worried about you being out so late.

- Values are our core beliefs and principles. Your parent's values are that: they worry about your safety,
accidents may happen, etc… Your values could be: you want to have fun, be there for your friend, etc… A
comprise is a solution that satisfies each party. The compromise you and your parents could come to is, no
excessive drinking involved, coming home either at a set time or straight after the party, letting an adult drop
you off, take a phone with you so you could contact home if needed. This satisfies both values since you are
able to have fun while your parents are well aware of your safety.

23.02.2023

Link & Apply Economic Concepts

Unlimited needs & wants Limited means > Scarcity = Decision making (values influence) = Choices

Choices > Opportunity cost

Choices > Compromise/conflict/ consequences

Activity: Run fish

Rainia is a Year 11 student training for a triathlon and working part-time at a local swim school

- Define what is meant by the term values = Values are our core beliefs and principles that we believe are
important
- State a value that Rania demonstrates when training for her triathlon = One value she demonstrates is the
importance of her health. She is able to stay fit while training for her triathlon.
- State a value that Rania demonstrates when teaching at a local swim school = A value she demonstrates while
working part-time at the swim school is money and wanting to help the children learn.
- As Rania’s triathlon comes closer, she thinks she might need to resign from her job at the swim school in
order to train after school and during weekends. Explain why this is a conflict = A conflict can arise over the
values people hold and the choices individuals make. This is a conflict for Rinia because resigning from her
workplace means she will be giving up her value of making money and being able to help the children learn
how to swim. However, she has limited means of time and she must make a decision between working or
training for the triathlon.
- Rania’s mum has told Rainia that her schoolwork must not drop in standard while she trains for the
triathlon. Fully explain 2 possible compromises that Rainia could make to resolve this conflict = A
 compromise is a solution that satisfies both parties. It must also satisfy the values each side holds. Her
mother's values for Rania are for her to study hard and get good grades. While Rania’s values are to be able to
study as well as train. Compromise 1: She can study and finish her homework before or after her training so
she doesn’t fall back in class or Rania could dedicate a day once a week to go through all her notes for class
and study/revise for anything she hasn’t been able to learn. Compromise 2: Whenever Rania finishes her
homework her mother can check her work to make sure she finished it and understood what she was
learning.

27.02.2023

Demand Schedules & Law Of Demand

Consumer demand:
A consumer is anyone who buys or uses goods or services. Downloading music from iTunes makes you a consumer,
and your parents buying groceries makes them a consumer. All of the consumers in your home make up a household.
All households in the economy make up what is known as the household sector of economy.

Individual demand:
Individual demand is how much of a particular good or service someone is willing and able to buy at a range of prices.
It is important to note that price is the main factor determining demand.

The law of demand:

As the price falls, the quantity demanded increases, ceteris paribus* and vice versa. Other factors that could change this
include income, tastes/fashions, or the price of other goods.

*Ceteris paribus is a Latin term that means ‘all other things remain the same.’

Demand Schedules:
The demand data can be seen more easily on a demand schedule, which is a table that contains a person’s demand
information for a particular good or service over a range of prices.

- Title - who is it for, what product, time frame

- Price column - listed in ascending or descending order
- Quantity demanded column

The demand curve:

The information from the demand schedule can be used to construct a demand curve, which is a graph illustrating the
number of goods or service a consumer is willing and able to buy.

In economics, we use the term ‘curve,’ for example a demand curve. These are not always curves they can be straight or
crooked lines, (all the points must meet).

- T = Title
- A = Axes
- L = Labels
- L = Line

28.02.2023

Demand
 - What is a consumer? A consumer is someone who buys or uses goods and services
- What is the household sector made up of? All households in the economy make up the household sector
- Define individual demand. The number of goods or services a consumer is willing and able to buy at a range
of prices
- What is the main factor which affects demand? The price of a good or service is a factor that affects the
demand
- Demand is the amount of a particular good or service you are able and willing to purchase at a range of prices
- The Law of Demand states… As the price falls the quantity demanded increases, ceteris paribus & vice versa
- What does ‘ceteris paribus’ mean? It is a Latin term that means ‘all other things remain the same.’

For demand to exist a consumer must be both willing and able to purchase an item. I.E they must both want it and be
able to afford it.

- It is not demand if consumers want it but can’t afford it

- It is not demand if consumers can afford it but don't want it

Good or Service Willing to buy it? Able to buy it? Demand it?

Ticket to the latest major X | X

movie release

Level 1 economics | | |
workbook

Spotify Premium X | X

Plane ticket to Australia X | X

2001 Nissan Skyline X X X

28.02.2023

Goods & Services

Consumers use goods and services to satisfy their needs and want.

D - Dotted lines
A - Arrows
L - Labels

07.03.2023

Describing Movements Along A Demand Curve

Only a change in price will cause a change in the quantity demanded and a movement along the demand curve
(assuming ceteris paribus).*

*Very Important Line

- A movement down the demand curve represents an increase in the quantity demanded
 - A movement up the curve is referred to as a decrease in the quantity demanded
Explaining the law of demand:

- The law of demand states that as a price of a good/service increases the quantity demanded decreases ceteris
paribus vice versa.
- E.g. As the law of demand states: as the price decreases from $180 (P1) to $140 (P2); the quantity demanded
increases from 4 (Q1) to 8 (Q2) per week. There is a movement down the demand curve.

09.03,2023

Income & Substitution Effect

There are 2 reasons why a person’s quantity demanded changes as the price of goods changes, (why a consumer buys
more at lower prices).

- Income effect: When the price decreases, a consumer will buy more of the good, (or the consumer is willing
and able to buy the good), as it becomes relatively more affordable, assuming income stays the same. (All the
same when the price increases)
- Substitution effect: When the price decreases, a consumer will buy more of the good as it’s relatively
cheaper (less expensive) than a substitute good. (The opposite is true when the price increases)

Consumer spending:

= Price x Quantity

Change in consumer spending:

= New consumer spending - original consumer spending

( New = P2 x Q2)
(Original = P1 x Q1)