Economics GRADE 12 exam with actual questions and correctly well defined answers.

economics - correct answer the study of the system of human activities related to the production, distribution, exchange and consumption of goods and services disposable income - correct answer money you have available to spend, also known as your 'take home pay' fixed supply - correct answer the amount of good or service that is available is limited, no more product will be created public goods - correct answer a good that is available and accessible to all scarcity - correct answer an inadequate amount of something, a shortage opportunity cost - correct answer the benefit lost of doing one thing rather than another economic goods - correct answer things that are tangible that satisfy human wants consumer goods - correct answer items used in everyday life in a household capital goods - correct answer goods used to produce other goods economic system - correct answer a mechanism which deals with the consumption, production and distribution of goods and services in a society economic resources - correct answer factors of production; land, labour and capital productive inputs - correct answer the term used to define items/products or materials that are inserted into a system of production, to make other products. micro-economics - correct answer the study of behavior of individuals and groups of individuals, such as consumers, household and businesses. macro-economics - correct answer the study of the economy as a whole, such as the overall level of consumption, investment, government spending, prices and employment market economy - correct answer businesses and consumers decide what they will purchase and produce without government intervention crown coporation - correct answer a corporation owned by a government, being ultimately responsible, through a cabinet minister, to that government mixed economy - correct answer as in Canada, provision of goods and services are from both public and private sectors privatization - correct answer the process of selling government enterprises to private interests absolute advantage - correct answer this exists when one country can produce that good using less resources than another country comparative advantage - correct answer when a person, region or country experiences a lower opportunity cost of producing a good than another person, region or country Demand - correct answer the desire for a product or service by consumers The Law of Demand - correct answer increase in price causes decrease in quantity demanded demand curve - correct answer a graph showing the quantities of a good a consumer is willing and able to buy at alternative prices inelasticity - correct answer if a price increase causes total revenue to rise elasticity - correct answer if a price increase causes total revenue to drop unitary elasticity - correct answer if a price increase results in no change in total revenue supply - correct answer quantity producers are prepared to offer for sale at each price the law of supply - correct answer if the price rises, then the quantity supplied rises and if the price of a product falls, then the quantity supplied falls positive statements - correct answer statements that are based on facts normative statements - correct answer statements made that are subjective and based on opinion only equilibrium - correct answer where the quantity of the product that consumers are willing to buy over a period of time equals the quantity producers are willing to supply surplus - correct answer where the quantity demanded falls short of the quantity supplied and extra product exists. shortage - correct answer the quantity demanded exceeds the quantity supplied inflation - correct answer describes the situation in which the general price level in a country is increasing multinational corporation - correct answer is a company that does production or delivers services in at least 2 countries An economy is: - correct answer - very complex or intricate system - is dynamic or subject to movement and exchanges - consists of interdependent people, groups and institutions, each performing specialized roles - involves a series of independent transactions motivated by economic goals - involves numerous transactions that create two circular flows Basic Economic Question - correct answer - What is produced? - How is it produced? - Who gets what is produced? perfect competition - correct answer businesses are selling standardized or identical products monopolistic competition - correct answer products being sold are similar but not exactly the same oligopoly - correct answer there are few sellers and many buyers monopoly - correct answer a single seller controls the entire industry or market Calculate Consumer Price Index (CPI) - correct answer (Price of basket in current year/ price of basket in base year) X 100 = CPI