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 ..... ** ||  ||


 * Robbie Boss**

or expensive and cost less long term. ||
 * **My Economic Problem** || $10000 to buy a car to drive to work that is efficient ||
 * **Scarcity** || Cars in that price range are don't offer that much variety plus I only have $10000 ||
 * **Opportunity Cost** || either cheap and cost more to maintain
 * **Circular Flow** || the household sector buys goods and services from the production sector though consumer expenditure ||
 * **Any others** ||  ||


 * Bill B**


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


 * Kelvin C**


 * **My Economic Problem** || Jack saved up $2500 to spend on a new laptop for school. ||
 * **Scarcity** || He only has $2500 to spend. ||
 * **Opportunity Cost** || If the computer Jack chooses is expensive he has less money to spend on other needs/wants.

Whilst he's supporting the production sector by increasing his investment, his savings are reduced because of the increased price. || Ms Stevenson: Be specific on opportunity cost ... with CFM - you need to identify at least 2 sectors and 2 flows
 * **Circular Flow** || Jack is spending money on a good which is helping to stimulate and expand the economy. ||
 * **Any others** ||  ||


 * Luke C**


 * **My Economic Problem** || Bob has saved up $25 000 to purchase a car. ||
 * **Scarcity** || budget of $25 000 ||
 * **Opportunity Cost** || If Bob buys one car (Mazda), he may have forgone buying a Honda. This is the opportunity cost as it is the next best alternative. ||
 * **Circular Flow** || As Bob has saved up his money and is looking to invest it, he is fufilling the financial sector of the sector. He is putting money into the buisness sector and hoping that he will make an income from it. The buisness sector in this situation is the car producer eg. Mazda. ||
 * **Any others** || Bob must also take into consideration the cost benefit analysis and weigh up the specifics of the car such as air-con, safty, wheels, speed etc. This can improve his decision so that he gets the most desirable car. ||


 * Arman C**


 * **My Economic Problem** || Alex wishes to purchase a vehicle. ||
 * **Scarcity** || The amount of money he has available to spend is limited to $7500. ||
 * **Opportunity Cost** || Alex will have to forego the opportunity of purchasing an option in the form of a vehicle as he can only afford and desires to purchase one vehicle. ||
 * **Circular Flow** || This money will flow through both the production sector as they are reponsible for the manufacturing of the vehicle as well as the possibility of the household sector if the vehicle is second hand. The government sector will also gain cash flow as Alex will be required to purchase registration for his vehicle. ||
 * **Any others** ||  ||


 * Jonathan D**


 * **My Economic Problem** || I have to have a computer for school so I can do work and go on Facebook ||
 * **Scarcity** || I am restricted to spending $1000 ||
 * **Opportunity Cost** || Will have to get a job and save up which means less free time to do thing's I want. ||
 * **Circular Flow** || By buying a computer I will be putting money into the the production sector. ||
 * **Any others** ||  ||

Ms Stevenson: Jonathon - Be specific on opportunity cost ... with CFM - you need to identify at least 2 sectors and 2 flows


 * Cam E**


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


 * Tom G**

Ms Stevenson: Tom - good start
 * **My Economic Problem** || my brother with twins on the way wants to buy a new house ||
 * **Scarcity** || he has a scarcity of only to spend 750,000 to spend on a house ||
 * **Opportunity Cost** || to spend money on his house he has to forgo the opportunity to buy a new car and go on a holiday ||
 * **Circular Flow** || he is investing his money into the household consumer expenditure Ms Stevenson: Identify the 2 sectors involved as well as the other flow ||
 * **Any others** ||  ||


 * Christian H**

Ms Stevenson: Christian - good start
 * **My Economic Problem** || My friend, Darren (24), has just left university and wants to invest into one set of shares in a business. ||
 * **Scarcity** || He has a scarcity of money to spend on the shares, being $10 000 ||
 * **Opportunity Cost** || To spend his money on shares, he has to forgo the opportunity to spend the money on a property. ||
 * **Circular Flow** || He is investing his money into the production sector's capital goods, which will expand the economy. Ms Stevenson: you need to identify at least 2 sectors and 2 flows ||
 * **Any others** ||  ||


 * Jackson H**


 * **My Economic Problem** || I have $15 000 to invest in a new car for transportation and independence. ||
 * **Scarcity** || I have scarcity of money to spend on the car, which is $15 000. ||
 * **Opportunity Cost** || To spend my money on a new car i have to forgo the opportunity to spend money on a holiday. ||
 * **Circular Flow** || I am investing my money into the production sector's capital goods, which will expand the economy. Ms Stevenson: you need to identify at least 2 sectors and 2 flows ||
 * **Any others** ||  ||

Ms Stevenson: Jackson - good start!


 * Sam K**


 * **My Economic Problem** || Jonah, 27, has $250,000 to spend on a modest house for his growing family in the outer eastern suburbs of Melbourne. ||
 * **Scarcity** || There is a restricted quality of house that can be purchased for $250,000 ||
 * **Opportunity Cost** || By purchasing a house, Jonah can't go to the pub every afternoon after work, and he won't be ab le to buy the new Great Wall Ute that he so desperately wants, and he won't be able to take his wife away on a holiday to some place nice without the kids. :-) With a nose!! ||
 * **Circular Flow** || ﻿Consumer Expenditure flows from the Household Sector to the Production sector. After he buys the house he will put his savings back into the finnancial sector to pay off his debt, therefore he will have to constrict his consumer expenditure. ||
 * **Any others** || He has weighed up the costs and benefits of this decision and decided that buying a house will be a good thing for his family in the future despite the cost, but he cannot afford to spend more than $250,000 because then it will not be worthwhile. ||

Ms Stevenson: Sam - Great start!


 * Harry K**


 * **My Economic Problem** || Fred, 19, has $10,000 to invest in one of three reliable companys to gain money he can use to buy tuition fees for his university. ||
 * **Scarcity** || There is a restriction of the number of universities that will allow him entrance for under $20,000. Also a scarce number of companies that will provide a certain gain in money. Only $10,000 to invest in the company will provide a smaller outtake. ||
 * **Opportunity Cost** || By investing in one company he will not be able to invest in another which could provide a higher outtake in the future. Alo by spending his money on tuition fees he will not be able to buy his own place and live on campus, or go for a gap year around the world to cities such as New York. :-) ||
 * **Circular Flow** || Fred's parents both work in the advertising buisness and they get income for the service to their company and they gave him some money. Also Fred is a tutor and gets money which he combines to invest in the financial sector of the economy and give his chosen company the ability to buy capital goods. Once he invests the money he puts in into the financial sector of the economy. Once here it is invested as an injection thus equaling his leakage. This will provide the company money to develop more goods and more money to put back into the economy.Also the taxes from his money will give more money to the government sector who will spend it on government expenditure. ||
 * **Any others** || After researching the costs and benefits of the three companies as reliability, possibility of gain, immediate outcome, future outcome, behaviour of the company, reaction to past events and any future events, Fred chose the company that best fitted his desired characteristics. ||

Ms Stevenson: Harry - good start!


 * Miller L**


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

Ms Stevenson: Miller - get started!


 * James M**

Ms Stevenson: James - get started!
 * **My Economic Problem** || Write in your answers here and below ||
 * **Scarcity** ||  ||
 * **Opportunity Cost** ||  ||
 * **Circular Flow** ||  ||
 * **Any others** ||  ||


 * Moss M**


 * **My Economic Problem** || Brad has $3,000 to spend on a laptop for uni. ||
 * **Scarcity** || He only has $3,000 ||
 * **Opportunity Cost** || If he buys an expensive laptop, he can't buy optional software updates ||
 * **Circular Flow** || He is investing into captial goods from the production sector, thus helping expand the economy. The purchase of goods and services by the household sector will help boost the consumer expenditure flow ||
 * **Any others** ||  ||

Ms Stevenson: Moss - good start!


 * Dougal M**


 * **My Economic Problem** || My mother is 40 years old. She is looking to invest in an overseas location ||
 * **Scarcity** || The houses in the Rural Phuket area are in very low supply and the demand is quite high because of the popular location, Bangtao Beach which attracts Hundreds of Thousands of tourists in the area per year. ||
 * **Opportunity Cost** || If she buys the Bigger House, she gets more space, but she is opting for the cheaper house with the perfect amount of space needed. ||
 * **Circular Flow** || She is investing into the Household sector which creates Injections into the Financial sector in the Phuket Economy, but flows out of the Household sector as a Leakage. ||
 * **Any others** ||  ||

Ms Stevenson: Dougal - keep going here ...
 * Lachie N**


 * **My Economic Problem** || Write in your answers here and below ||
 * **Scarcity** || scarcity of money to spend on phones being $1000 ||
 * **Opportunity Cost** || the next best alternative of phone ||
 * **Circular Flow** || hes buying his phone which is the consumer expenditure flow from the Household Sector to the Production Sector and receives the phone (good) from the production sector which is the output flow ||
 * **Any others** ||  ||

Ms Stevenson: Lachie - good start!
 * Daniel S**

Ms Stevenson: Daniel - good start - please refer to comments on Page 1 plus comments above !
 * **My Economic Problem** || I want an apple product for entertainment in boring situations. i.e. bus/train rides ||
 * **Scarcity** || He has a limited amount of money to spend, $1000 ||
 * **Opportunity Cost** || By buying an IPod I will have to restart savings to buy a new computer ||
 * **Circular Flow** || By buying this good, money will be inserted into the production sector and over time the economy will expand. Ms Stevenson: you need to identify at least 2 sectors and 2 flows related to your purchase of the laptop ||
 * **Any others** || The costs of apps/music purchases are not in the $1000. They will also set back the time to buying a computer ||


 * Hugo S**


 * **My Economic Problem** || I have got a budget of $18500 to buy and maintain a car. ||
 * **Scarcity** || I have a scarce amount of money available to the purchase. ||
 * **Opportunity Cost** || By purchasing a car i can't party every weekend nor purchase new xbox games. ||
 * **Circular Flow** || By purchasing a car, i am investing my allotted money into the production sector's capital goods, hence, the economy will expand Ms Stevenson: you need to identify at least 2 sectors and 2 flows related to your purchase of the laptop ||
 * **Any others** ||  ||

Ms Stevenson: Hugo - good start!


 * Tristan S**


 * My Economic Problem || I have just started uni and have left my parents place. I need to buy some essential items which I cannot currently afford. With normal living expenses to consider I need to know whether having a credit card will make my life easier. ||
 * Scarcity || I have unlimited wants, and with the limited resources I have - money - I cannot get these wants. With a credit card I will be able to get all the things I want, when I want them. However I will have to pay the card companies back, but I would have had enough time to save up money to repay my loans. ||
 * Opportunity Cost || I can choose a card which has high interest (saving), but high fees, or I could choose a card holder who has a low interest (saving) with low fees. ||
 * Circular Flow || The financial sector is involved with this problem. There are leakages as saving would occur through the card I obtain. The leakages} injections as I tend to save more than I spend. This would be the ideal situation. More $ will be coming out of the CFM than the $ going in. ||
 * Any others ||  ||


 * **My Economic Problem** || I have just started uni and have left my parents place. I need to buy some essential items which I cannot currently afford. with normal living expenses to consider I need to know wether having a credit card will make my life easier. ||
 * **Scarcity** || I have unlimited wants, and with the limited resources I have - money - I cannot get these wants. with a credit card I will be able to get all the things I want, when I want them. however I will have to pay the card companies back, but I would have had enough time to save up money to repay my loans. ||
 * **Opportunity Cost** || I can choose a card which has high interest (saving), but high fees, or I could choose a card holder who has a low interest (saving) with low fees. ||
 * **Circular Flow** || the financial sector is involved with this problem. there are leakages as saving would occure through the card I obtain. the leakages } injections as I tend to save more than I spend. this would be the ideal situation. More $ will be coming out of the CFM than the $ going in. ||
 * **Any others** ||  ||


 * Cameron T**

Ms Stevenson: Cam - good start!
 * **My Economic Problem** || I need to buy a computer for homework and games ||
 * **Scarcity** || I only have $2000 ||
 * **Opportunity Cost** || Will have to have a tight budget to save enough money for university. If the laptop is more expensive, will have less money to spend on games. ||
 * **Circular Flow** || Money will flow from the household to the production sector. The real flow is the factors of production being used to make the laptop, which then goes back into the household sector. ||
 * **Any others** ||  ||
 * Grant T**


 * **My Economic Problem** || Needing to buy a house ||
 * **Scarcity** || Money only got 1.2mill but want to cheaper ||
 * **Opportunity Cost** || By purchasing one place, can not purchase another place ||
 * **Circular Flow** || Put money into the economy thorugh buying a house ||
 * **Any others** ||  ||


 * Jayanga W**


 * **My Economic Problem** || John needs to find a faster and a more efficient broadband plan (above 100gb) which is under $60 ||
 * **Scarcity** || restricted to a maximum of $60 spending on broadband ||
 * **Opportunity Cost** || the next best alternative broadband plan that is foregones to make decision on one internet plan. ||
 * **Circular Flow** || by spending money on a broadband plan John will be injecting money to the production sector ||
 * **Any others** ||  ||


 * Nigel W**


 * **My Economic Problem** || I would like to invest my $2000 currently invested in my savings account at NAB which is giving me no return and invest in something which gives me a higher return (within 12 months) such as a Cash / Fixed Interest Deposit ; Shares ; or Property, so I can buy myself a new laptop computer. ||
 * **Scarcity** || There is only $2000 to invest. ||
 * **Opportunity Cost** || The opportunity cost involved is that when I decide to invest in one of these three types of investment, the best alternative maybe foregone. For example: I invest in a Cash / Fixed deposit which may mean I may not be able to invest in Shares. There is also an opportunity cost related to getting a negative return from my savings.The investment I ultimately choose may have a downturn which could result in the share value of a company falling or the value of property owned by a property trust. ||
 * **Circular Flow** || In terms of the circular flow, the savings will flow through investment ||
 * **Any others** ||  ||


 * Jackson Z**


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