Introduction to Economics

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Mind Map on Introduction to Economics, created by Tom Barber on 09/17/2014.
Tom Barber
Mind Map by Tom Barber, updated more than 1 year ago
Tom Barber
Created by Tom Barber over 10 years ago
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Introduction to Economics
  1. Types of Economics
    1. POSITIVE ECONOMICS - based on testable theories, e.g. the idea that higher interest rates lead to a fall in aggregate demand can be tested by looking at past data.
      1. NORMATIVE ECONOMICS - based on opinion, e.g. the idea that the Government should make the reduction of unemployment its priority, is one person's view; another person might think it is more important to increase growth. Normative statements often have 'should' or 'ought to' in them; they involve value judgements.
        1. MICROECONOMICS - focuses on individual markets and decisions by individual households and firms.
          1. MACROECONOMICS - focuses on the economy as a whole, e.g. it considers the price level for the economy as a whole, rather than for one market.
          2. Sectors of the Economy
            1. PRIVATE SECTOR - resources owned and controlled by private individuals.
              1. PUBLIC SECTOR - resources owned and controlled by the State.
                1. PRIMARY SECTOR - extractive industries, e.g. forestry, fishing, mining.
                  1. SECONDARY SECTOR - converts raw materials into goods, e.g. manufacturing.
                    1. TERTIARY SECTOR - service sector, e.g. finance, tourism.
                      1. In the UK, the service sector has been growing and the primary sector has been declining for some time.
                      2. Factors of Production
                        1. Factors of production go through a transformation process and are turned into output.
                          1. LAND - natural resources, e.g. land itself, minerals, the sea
                            1. LABOUR - human resources; this depends on the population size, the working age, people's skills and the level of training.
                              1. CAPITAL - man-made aids to production, e.g. factories and equipment.
                                1. ENTREPRENEURSHIP - this is the ability to combine factors of production and take risks in establishing new ventures.
                                2. Types of Productions
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