VCE Economics questions and answers with complete solutions
Relative Scarcity - Answer A situation where resources are limited compared to the demands placed upon them via needs and wants Needs - Answer The basic goods and services that are necessary for our survival Wants - Answer Goods and services that we desire to improve our satisfaction or quality of life, but are not necessary for our survival Resources - Answer The factors of production such as natural, labour and capital resources that are used to make goods and services Opportunity Cost - Answer The value of the next best alternative that is foregone whenever a choice is made Perfectly Competitive Market - Answer 1. Homogenous products, 2. Perfect information 3. Easy of entry and exit 4. Many buyers and sellers 5. Both buyers and sellers seek to maximise their own well-being. Nature: firms are price takers; i.e. suppliers have little influence on prices. Law of Demand - Answer As price increases, the quantity demanded decreases; and as price decreases, the quantity demanded increases. Movement of the Demand Curve - Answer Demand changing
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