Mind map
What is economics?
Mind map: what is economics
Map content
What is economics?
" study of choices and their consequences"
- What governments can afford= limited collected taxes, society (everyone) can afford limited by productive resources available
- Incentive reconcile choices -> you choose to buy laptop, someone else must choose to sell it
Scarcity " our inability to get everything we want"
Incentive " reward/penalty that (dis)encourages an actin" -> $$ laptop too high= more supply than demand, $$ laptop too low, fewer supply than demand
Economics " social science that studies the choices of individuals, businesses, governments, societies as they cope with scarcity+incentives that influence +reconcile those choices"
- Macroeconomics " study of the perfomance of the national + global economy"
- Microeconomics "study of choices individuals+ business make & the way these choices interact in markets + influence gov"
- 2 Q's
- WHAT, HOW, WHOM?
- WHAT= GOODS & SERVICES
- HOW= FACTORS OF PRODUCTION
- LAND= "GIFTS OF NATURE USED TO PRODUCE G+S
- EX. land, metal ores, oil, gas coal, water
- LABOUR= work time+ work effort devoted to producing G&S
- Physical+ mental
- CAPITAL= " tools, instruments, machines, buildings +other constructions used for G&S"
- NOT MONEY!
- ENTREPRENEURSHIP = "human resource that organises FoP. -> comes up with new ideas what/ how to produce + bears risks from decisions"
- LAND= "GIFTS OF NATURE USED TO PRODUCE G+S
- WHOM= PPL EARN INCOMES SELLING SERVICES OF THE FoP THEY OWN
- Earns profit
- Earns interest
- earns wages
- earns rent
- SELF OR SOCIAL INTEREST?
- Self interest: choices that you think are best for you
- Social interest: choices that are best for society as a whole
- Efficiency; when the available resources are used to produce G&S @ lowest possible price + in q's hat give greatest benefit
- Equity: fairness
- hot topics
- globalization
- climate change
- information age
- economic instability & financial crisis
- WHAT, HOW, WHOM?