Year 9 Economics and Business Revision Sheet

Name: ________________________________________
1. a. What is ‘economics’?

A: Many different definitions including: Solve problems

surrounding consumer choice. Predicting future trends in
global markets. Concerned with the production, consumption,
and transfer of wealth.

b. What is the purpose of an economic system?

It allocates the scarce resources as best as possible

c. What is the economic problem that everyone faces?

Unlimited wants chasing limited resources

d. What is scarcity? Explain this term using the words supply and demand and provide two
examples.
Society has insufficient productive resources to fulfill all human wants and needs. Producers
can only supply a certain amount even though demand may be extremely high. E.g. oil and
natural gas – there is only a finite amount of these, particularly in certain areas of the globe,
yet they are widely and rapidly used, but will eventually run out.

e. What is the opportunity cost if I decide on a shopping trip to buy a new pair of jeans?
The next best thing that you would do instead of going on a shopping trip. It varies from
person to person based on our wants.

f. What are the four factors of production? List two examples of each.
Land (natural resources of the land) – rivers, soil
Labour (the employees used to create the good or service) – cashier, gardener
Capital (goods used in further production to create more goods)– hammer, computer
Enterprise (organising all factors of production) – manager

2. Complete the flow diagram below. Fill in the tables and the two way arrows showing the flow
of money entering and leaving the system.

The Circular Flow of Income Model

 a. What are the advantages and disadvantages of exporting goods to overseas countries?
Advantages- increase your markets, economies of scale so able to make good cheaper,
specialisation in that field, increase in foreign relationships, increases money into the
economy

Disadvantages- increased administration costs, money comes into the economy, they may
impose tariffs on our products making them expensive (China imposed tariffs on Australia’s
agricultural products), Australia can become too reliant on another country for its export
market, e.g. China.
b. What are the advantages and disadvantages of importing goods from other countries?
Advantages- increase consumer choice, better foreign relationships with other countries,
can use comparative advantage to create products

Disadvantages- domestic producers have increased competition that may make them close
down, possible tariffs for consumers, Australia relies on other countries for vital goods that if
they choose to not send affects us greatly e.g. cars, oil

c. What is the difference between a trade surplus and a trade deficit? Which currently does
Australia have? A country exports more than it imports is a trade surplus. When the
opposite is true, the country is said to have a trade deficit. Australia has a trade deficit.

d. What strategies can a government employ to protect domestic producers and make them
more competitive compared to imported products? Is this a good strategy to use? Why?
Tariffs (tax on foreign goods) help the domestic market look more attractive price-wise to
consumers and subsidies are used to help reduce costs associated with labour for business,
making price seem more reasonable. It is difficult to maintain in long run because it is
expensive. Can save a lot of jobs and keep us able to produce important goods such
ammunition, and planes. Other factors affect whether it is effective.

e. Australia is a member of APEC. What does it stand for? What is its function? How is it
advantageous to belong to this trade organisation?

APEC is Asia-Pacific Economic Cooperation facilitates economic growth and prosperity in the
region. Helps trading between close proximity countries. They “promote balanced and
sustainable economic development in order to narrow development imbalances and reduce
poverty”.
It is advantageous to belong to APEC as we help our LEDC neighbours and gain favourable
trade relations.

3. a. What is ‘globalisation’ and how does it affect all countries? Increasing integration of
markets in the world economy due to decreased transportation and communication costs. Every
country has access to more trade increasing their economic growth and satisfaction
b. What is ‘comparative advantage’? What are Australia’s comparative advantages? Why
are they different to other developed nations like the US and Japan?
Comparative Advantage is making a specific product more efficiently than another country.
Aust. has a comparative advantage in land and natural resources like minerals. They differ
from other developed countries because we have a much larger size and naturally more
resources and are a younger country so they have not been all used up as much. Our climate
and soils are good for agricultural production.

c. What comparative advantage does a poor country, like Bangladesh, have? Does this
country get exploited for that advantage? Labour and environmental regulation. Bangladesh
is exploited because they have relaxed/minimal labour laws and lower labour right
expectations so workers experience low wages and very poor work conditions. The
environment is often damaged to allow increased production.

d. What are the advantages of globalisation? Are there disadvantages and, if so, what would
they be?
Advantages: Increases free trade, eliminates cultural barriers, sharing of technologies, allows
for the movement of people around the world.
Disadvantages: increases search for cheap labour for exploitation, pollution in other
countries, spread of diseases such as COVID-19..
e. What do members of trade treaties and agreements aim to achieve with ‘free trade’? a
comparative advantage, increase exports, achieve economies of scale to decrease cost per
item, economic growth for the country, eliminate surplus stock

f. What is the difference between a multinational corporation and a trans-national

corporation? Usually, management is located within one country and localised for MNC. TNC
can have several different owners and operators and do not have any subsidiaries. Their
production process occurs in more than one country.

4. All countries are interconnected to a greater

extent than ever before. International trade has contributed to economic growth and
the generation of wealth in countries that import and export goods and services.
Developments in trade and communications have made trade easier and broken down
many trade barriers.

Global events impact our economy. It can be in a positive way, like accessing a wider range
of goods and services, and in a negative way, such as the spread of the COVID-19 pandemic.
In the table below, consider the impacts, both positive and negative, of each world event
and list the possible repercussions for Australia.

Global impact Repercussions

Russia invades Ukraine Many countries impose trade sanctions on Russia

We don’t buy their oil and, as a consequence, the cost of fuel
rises, which also adds to the cost of transported goods.
Australia is sending military aid to Ukraine to fight the conflict.
Stock markets were affected, causing some stock prices to fall.
This affects invested money’s value.

COVID-19 Many people work from home or are isolated. This has
affected productivity.
Fewer goods and services are provided from countries so
supply shortages exist. Some products are not available.
Supply chains were disrupted e.g. car supplies were limited
due to shortages of microchips.
The cost of living has risen affecting people’s standard of living.
Australian Govt. has gone into extra debt in order to support
its people and businesses during this time with additional
COVID payments.

Cyclone in the SW of Asia Many agricultural goods that are imported to Australia from
that caused flooding of this region will not be available.
agricultural land The Asian countries may require Australian foreign aid to help
rebuild.

Global Financial Crisis: Increased unemployment reduces productivity and reduces

World-wide economic GDP for that country. This affects government spending.
Depression Governments may need to provide more aid to support their
people, affecting other areas of need.

Use of container ships to Shipping containers store a lot of products and are easy to load
transport goods across the and unload onto ships. They have made the movement of
seas. products cheaper and more efficient.
Importing and exporting have become cheaper methods of
obtaining products.