39291556
Description
Mind Map by Analyssa G, updated more than 1 year ago
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Created by Analyssa G
over 2 years ago
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Economics
- Is the study of how
humans make
decisions in the face
of scarcity
- Scarcity means that human
wants for goods, services and
resources exceed what is
available
- Scarcity means that human
wants for goods, services and
resources exceed what is
available
- Adam Smith
introduced the idea
of dividing labor
into discrete tasks in
his famous 1776
book, The Wealth of
Nations
- Division of labor is the way in which different
workers divide up tasks to produce a good or service
- Specialization: when
workers or firms focus on
particular tasks for which
they are well suited for
- Allows businesses to take
advantage of economies of
scale, which means that as
the level of production
increases, the average cost
of producing a single item
decreases
- Allows businesses to take
advantage of economies of
scale, which means that as
the level of production
increases, the average cost
of producing a single item
decreases
- Specialization: when
workers or firms focus on
particular tasks for which
they are well suited for
- Division of labor is the way in which different
workers divide up tasks to produce a good or service
- Microeconomics: on the
actions of the ind. agents
like households, workers,
and businesses
- Macroeconomics: broad
issues such as growth,
unemployment, inflation,
and trade balance
- Monetary policy involves
altering the level of interest
rates, the availability of credit
and the extent of borrowing
(determined by a nation's
central bank)
- Fiscal policy is
economic policies that
involve government
spending and
taxes(determined by a
nation's legislative
body)
- Monetary policy involves
altering the level of interest
rates, the availability of credit
and the extent of borrowing
(determined by a nation's
central bank)
- John Maynard Keynes - most
influential economists in
modern times- thought that
economics teaches you how
to think, not what to think
- Theory is a simplified
representation of
how two or more
variables interact
with each other
- Economists use
models to test
theories
- Circular flow Diagrams
show how households
and firms interact in the
goods and services
market, and in the labor market
- The directions show that in the
goods and services market,
households receive goods and
services and pays firms for them
- In the labor market, housholds
provide labor and reicve
payment from firms
- In the labor market, housholds
provide labor and reicve
payment from firms
- The directions show that in the
goods and services market,
households receive goods and
services and pays firms for them
- Traditional Economy - typically an
agricultural economy where
things are done the same as they
have always been done
- -oldest economic system
-used in parts of Asia, Africa,
and South America
-occupations tend to stay in
the family - what you
produce is what you
consume -little economic
progress or development
- -oldest economic system
-used in parts of Asia, Africa,
and South America
-occupations tend to stay in
the family - what you
produce is what you
consume -little economic
progress or development
- Command Economy- where economic
descions are passed down from
governement authority and where the
government owns the resources
- -Government decides what goods and services are
produced and what the prices are -gov. decides methods of
productions and wages -gov. provides necessities like
healthcare and education for a fee -Anceint Egypt, Medieval
manor life, Communism, Cuba, N Korea
- -Government decides what goods and services are
produced and what the prices are -gov. decides methods of
productions and wages -gov. provides necessities like
healthcare and education for a fee -Anceint Egypt, Medieval
manor life, Communism, Cuba, N Korea
- Market Economy: decisions are decentralized, private
individuals own resources, and businesses supply
goods and services based on demand
- Globalization: trend in which buying and
selling in markets have increasingly crossed
national borders
- Gross Domestic Product(GDP) measures the total
production of an economy
- Gross Domestic Product(GDP) measures the total
production of an economy
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