2.++Economic+concepts+and+theories

= 2. Economic concepts and theories = **Your task** 1. Press edit above 2. Move your cursor below your name (scroll down) - only work in the area under your name 3. Use Ms Stevenson's exemplar as an example

**Miss Stevenson's exemplar:** (note you can not use my topic! Go to your task sheet for more topic examples.)


 * **My Economic problem**: || Grandma has $1000 to spend on a pedigree dog to provide companionship, exercise and security. ||
 * ** Scarcity: ** || Describe how scarcity applies to the above problem ||
 * ** Opportunity Cost: ** || Describe how opportunity cost applies to the above problem ||
 * ** Circular Flow: ** || Describe how CFM applies to the above problem eg which sectors are involved and which $ flows are involved ||
 * ** Any others ..... ** ||  ||


 * Tom B**

the oppurtunity to receive the benefits of a different card from a different bank ||
 * **My Economic Problem** || I need a credit card that can suit my income ||
 * **Scarcity** || There is a scarcity of plans i can have due to my limited income ||
 * **Opportunity Cost** || If i choose to get one card (eg. a card from the commonwealth bank) i will forfeit
 * **Circular Flow** || It is in the household sector because it involves consumer expenditure ||
 * **Any others** ||  ||


 * Harry B**


 * **My Economic Problem** || My income tax is too high ||
 * **Scarcity** || There is a scarcity is real estate houses. ||
 * **Opportunity Cost** || I cant buy a nice car or a house for myself to live in ||
 * **Circular Flow** || Government Tax will decrease, consumer expediture will increase, income will decrease. ||
 * **Any others** || None ||


 * Joshua C**

to invest in using the location, building and cost as criteria within ** the price **** range of $850 000 to $900 000. ** **Scarcity:** Scarcity relates to the declining supply of houses within Brisbane and therefore an increase in  demand and price. Also, regardless of whether the businessman wants to buy two houses or an exceedingly high priced property he does not possess the adequate amount of time or money to do so. Finally, the limited resources of the people interested in renting out the house also affects the price they are willing to pay and if they are willing to stay. ||
 * **My Economic Problem** A successful businessman of 50 years old is trying to decide on his next property

rather than buying the property such as a car, renovations on his own house, a computer or a television, however this is by far the more profitable choice. Furthermore, with the purchase of any house, there will always be others you were not able to buy which is why you need to undergo significant evaluation before you make the decision in order to select the most rational, profitable property. || from one household to another. Although this man works for the production sector the purchase is made for self-generating profit as opposed to his company's benefits. ||
 * **Opportunity Cost** || There is an endless list of goods and services which the businessman could have opted to purchase
 * **Circular Flow** || The money from the purchase remains within the household sector, simply transferring income
 * **Any others** ||  ||


 * Adam C**

and I need it to be durable, have a camera, be able to perform standard mobile phone functions and I would prefer it to have some extra features as well. || The amount of money I am limited to is $50 per month for the phone plan. The phone is free with the plan. || context of my current economic predicament is quite an important factor to consider. The opportunity cost of getting any phone means that the money used is not available for use in other areas. For example, I might be unable to buy a new iPod to replace my broken iPhone because I am spending my limited money on a new mobile phone. || secotrs involved in the transaction are the household sector and the production sector. ||
 * **My Economic Problem** || I want to buy a new phone on a monthly plan of $50 or cheaper,
 * **Scarcity** || The only resource which is scarce in my economic problem is money.
 * **Opportunity Cost** || The opportunity cost, or the value of the next best opportunity forgone, in the
 * **Circular Flow** || Because this is a simple example of consumer expenditure, the only two
 * **Any others** || N/A ||


 * Jack C**


 * **My Economic Problem** || I need to find a credit card that will suit my income. ||
 * **Scarcity** || There is no scarcity in credit cards but there is scarcity in what plans i can have due to my income. ||
 * **Opportunity Cost** || Choosing one card may rule out other advantages of getting a different card ||
 * **Circular Flow** || The credit card is in the household sector because it is consumer expenditure. ||
 * **Any others** || N/A ||


 * James C**


 * **My Economic Problem** || i am a 17 year old and i have to choose a savings account to save some of the money i earn in income by working part-time. ||
 * **Scarcity** || Money is a limited resource because my wants are unlimited and it is nessecary to save some of this income for future use. ||
 * **Opportunity Cost** || The opportunity cost of purchasing a Commonwealth Bank of Australia Card is the purchasing of The Anz Key Card. The interest rates for the Commenwelath Bank 4.50%. However, the interest rates for Anz is 5.25%. ||
 * **Circular Flow** || The economic problem of deciding which savings account to choose for a 17 year old relates to the financial sector accounts are created and interest rates are set by these institutions. The household sector is also involved, as income is provided to the household sector in return for resources (land,labour,capital,enterprise) and consumer expenditure. ||
 * **Any others** || N/A ||


 * Christopher D**

house. || can be determined by any criteria. ||
 * **My Economic Problem** || Deciding the best property to invest in based on a number of criteria. ||
 * **Scarcity** || If the amount of property is scarce in the area, and the area is in high demand, then it will affect the price of the
 * **Opportunity Cost** || When a house is purchased, there is a oppurtunity cost involved, which is the next best alternative. The opportunity cost,
 * **Circular Flow** || The household sector is involved in this investment. ||
 * **Any others** ||  ||


 * Nick F**

Satisfy my unlimited wants ||
 * **My Economic Problem** || I have limited resources to
 * **Scarcity** || There is a scarcity of the amount of money I have, but I will have the money in the future. ||
 * **Opportunity Cost** || The intrest I pay on the card becomes an opportunity cost for burrowing money. ||
 * **Circular Flow** || The credit card interacts with the household, finacial and bussiness sector, by taking a small loan out from the finacial sector to pay for goods from the bussiness for the household sector. ||
 * **Any others** ||  ||


 * James F**


 * **My Economic Problem** || Write in your answers here and below ||
 * **Scarcity** ||  ||
 * **Opportunity Cost** ||  ||
 * **Circular Flow** ||  ||
 * **Any others** ||  ||


 * Daniel G**


 * **My Economic Problem** || Finding an apartment that satisfies our wants under a budget of $1,500,000 ||
 * **Scarcity** || There are only a limited number of appartments that will fit our budget and wants. ||
 * **Opportunity Cost** || The opportunity cost of picking an apartment over another would be the apartment we did choose. ||
 * **Circular Flow** || The household sector is involved as it is a property which we are interested in. ||
 * **Any others** ||  ||


 * James H**


 * **My Economic Problem** || When I have enough income, I will begin to invest in shares. I have $10000 choose between shares in which to invest my money. I can choose between shares in The Commonwealth Bank, ANZ Bank and The National Australian Bank. ||
 * **Scarcity** || The problem of scarcity isin't relevant to my Economic Problem. ||
 * **Opportunity Cost** || If investing in The Commonweath Bank, I have forgone the opportunity to invest in the other shares (ANZ bank and NAB bank) and the same with the other shares. ||
 * **Circular Flow** || Financial sector. ||
 * **Any others** ||  ||


 * James K**


 * **My Economic Problem** || A 13 year old teenager and his/her parents have to choose a savings account to save some of the money he/she earns in wages (Y) by working part-time or the money he receives from his parents. ||
 * **Scarcity** || Money is a limited resource (for him) and a 13 year old has unlimited wants, and therefore a savings account is necessary to save some of this income (wage or pocket money) for future use. There is also a scarcity of suitable intermediary savings accounts for a 13 year old; with limited withdrawal access and a high interest rate (form of income). ||
 * **Opportunity Cost** || The opportunity cost or next best alternative to choosing an ANZ Progress Saver is the Bendigo Bank Piggy Bank Passbook account or the the Greater Building Society Little Buck's account and vice versa. There is also a monetary opportunity cost as the Bendigo Bank account and the Greater Building Society account costs $1 upfront and therefore the ANZ account would be the monetary opportunity cost, as the ANZ account costs nothing upfront, however requires a minimum $10 deposit. Also the opportunity cost to placing income into this account, is that there is minimal withdrawal access and money is therefore not as readily available for goods and services (Computer game, sports equipment). Also instead of choosing a savings account the teenager could have chosen a credit card, however, this would not have been suitable due to his/her age. ||
 * **Circular Flow** || The economic problem of deciding which savings account to choose for a 13 year old teenager relates to the financial sector and particularly ADI banks, building societies and credit unions as the accounts are created and interest rates are set by these institutions; in accordance with the Reserve Bank of Australia. However, the household sector is also involved, as money (income) is provided to the household sector in return for resources (land,labour,capital,enterprise- real flow) and consumer expenditure (money flow) and also as there is a leakage of income in the CFM from the household sector to the financial sector in the form of savings, as opposed to the static economic system (2 sector economy) where total Y=total O=total E. ||
 * **Any others** || N/A ||


 * Thomas K**


 * **My Economic Problem** || I want a new phone plan, with either unlimited texts or a lot of credit. Cost of calls is not important, as I rarely call people from a mobile. ||
 * **Scarcity** || Money is a limited resource, which in turn means that the plans available to suit my budget are limited as well. ||
 * **Opportunity Cost** || The Oppurtunity Cost of getting the Virgin $29 Smart Cap is the Virgin $29 Big Cap. The Smart Cap offers unlimited texts, 1Gb data allowance and $50 for calls at the same 49c flagfall, 99c a minute rate as the Big Cap. The Big Cap offers $450 of credit, out of which both the texts and calls come out of. Texts are 28c each on this plan and calls are at the above rate. The Big Cap does not offer any internet allowance. By looking at the way I have used my phone in the past as well as the phone i was looking to get with the plan, I realised that I would need an internet allowance and it would be good to have the peace of mind of not worrying about going over my cap through texting. Because this i realised that the Smart Cap would be the best for me and how i use my phone. ||
 * **Circular Flow** || The problem of deciding which phone plan to choose relates to the household and the enterprise sectors of the CFM. Money (Income) is traded with the enterprise sector in return for the phone and it's plan (resources). Also the financial sector is involved as most of the money (Income) will paid from my bank account(Financial Sector) directly to Virgin Mobile (Enterprise). ||
 * **Any others** || Nah Bro ||


 * Kevin B**


 * **My Economic Problem** || Write in your answers here and below ||
 * **Scarcity** ||  ||
 * **Opportunity Cost** ||  ||
 * **Circular Flow** ||  ||
 * **Any others** ||  ||


 * Jeremy M**


 * **My Economic Problem** || I, a 19-year-old employed college student, want to apply for a debit card to suit my needs. ||
 * **Scarcity** || Money is in scarcity as I have unlimited wants but I do not have unlimited wealth/resources. However I do have a constant income so it is not a totally limited resource. ||
 * **Opportunity Cost** || If I chose a debit card then the next best alternative is a credit card or an EFTPOS card, however through a cost/benefit analysis a debit card deemed to be more useful. In terms of debit cards I have the option of choosing three different cards from three different banks: NAB, Westpac and Commonwealth Bank and whichever card I choose the opportunity cost would be the other two not picked as well as the other banks that offer a debit card. Also, to use a debit card income is stored in a bank account and the opportunity cost of that is holding the income as cash and spending it on goods and services. ||
 * **Circular Flow** || The money I put into the bank account comes from income (Y) as a result of working in the production sector and is technically saving (S), a part of the financial sector. However it also relates to the household sector because the debit card is a tool for consumption/consumer expenditure (CE) of goods and services. ||
 * **Any others** || None. ||


 * Ash M**


 * **My Economic Problem** ||  ||
 * **Scarcity** || At the moment the market is at a low and units are cheap but in the next few years property prices will rise again. Thus meaning that cheap units will become scarce and now is the best time to buy. ||
 * **Opportunity Cost** || The opportunity cost of buying a unit is that he can than not afford to buy a boat. ||
 * **Circular Flow** ||  ||
 * **Any others** ||  ||


 * Rigel N**


 * **My Economic Problem** || I have $2000 to spend on a new laptop which can play good graphics games. ||
 * **Scarcity** || I have only $2000 so with a limited resources, I have to choose what is the best option. ||
 * **Opportunity Cost** || I will have to give up the opportunity to buy a different computer. ||
 * **Circular Flow** || There is an injection to the Production sector (consumer expenditure) from the household sector by buying the product of the production sector with income. ||
 * **Any others** ||  ||


 * Michael P**


 * **My Economic Problem** || borrowing and credit - credit card for a young person ||
 * **Scarcity** || how much you can borrow ||
 * **Opportunity Cost** || social life, other cards that i could have invested in, more work ||
 * **Circular Flow** || savings, household, income, investments ||
 * **Any others** ||  ||


 * Charlie Q**


 * **My Economic Problem** || Try to get a pure white cat and pure breed within $1500 budget ||
 * **Scarcity** || Kitten is not scarce but having a free pure breed white cat is scarce. ||
 * **Opportunity Cost** || If I chose the kitten, then I can't choose the high tech game console for my graduation present. ||
 * **Circular Flow** || Household and company ||
 * **Any others** || Nope ||


 * Andrew S**


 * **My Economic Problem** || Best credit that suits a 20 year old university student ||
 * **Scarcity** || The amount he/she can spend ||
 * **Opportunity Cost** || Other types of cards ||
 * **Circular Flow** || This falls under the household sector because the card is a form of consumption/consumer expenditure ||
 * **Any others** || N/A ||


 * Archie S**


 * **My Economic Problem** || A mother and business-owner in her mid-forties wants to open a new super fund as she wants to distribute her income as a safety precaution for her retirement, while managing other financial commitments, on a varying income. ||
 * **Scarcity** || The lady has limited income to satisfy various financial commitments. These include paying off her loans, school fees, business and household costs as well as the added (short-term) cost of superannuation. She will need to decide how to distribute her earnings. ||
 * **Opportunity Cost** || * Opportunity cost of picking one financial commitment over another. For example, the opportunity cost of investing in a superannuation fund is that she will pay back her loans at a slower rate and she may feel added financial stress.
 * Opportunity cost of picking one super scheme over another. For example, one may have a higher return rate after retirement, but the opportunity cost is the lower fees and commission of another scheme. ||
 * **Circular Flow** || In this scenario, the CFM sectors involved are the financial sector, the government sector and household expenses. Household expenses determine the amount the lady can put towards her super. The financial sector determines what sort of benefits she will get out of her investment and how her super will be invested. The government sector determines how her income and investments will be taxed. ||
 * **Any others** || N/A ||


 * Eliot S**


 * **My Economic Problem** || To retire at the age of 50 ||
 * **Scarcity** || N/A ||
 * **Opportunity Cost** || Working and earning more income for another 10years after reaching the desired age of retirement. ||
 * **Circular Flow** || This would fall under the household sector, as Income is earned. ||
 * **Any others** || N/A ||


 * David T**
 * **My Economic Problem** || A Businessman is looking to buy a house that will provide enough room for his family ||
 * **Scarcity** || Not enough houses on the market that will suit his wants/needs ||
 * **Opportunity Cost** || The next best alternative to buying a new house would be to purchase land and build a house from scratch which will take months as the current home cannot be renovated to suit the wants/needs of the businessman and his family. ||
 * **Circular Flow** || Purchasing a house would result in an injection of Consumer Expenditure (CE) into the household sector as the consumer is purchasing the house from the household sector. ||
 * **Any others** || N/A ||