Unit 1 - Markets & Market Failure

Ben Cooke
Mind Map by Ben Cooke, updated more than 1 year ago
Ben Cooke
Created by Ben Cooke over 5 years ago
28
1

Description

AS Economics Mind Map on Unit 1 - Markets & Market Failure, created by Ben Cooke on 01/25/2015.
Tags

Resource summary

Unit 1 - Markets & Market Failure
1 Economic Activity
1.1 Factors of Production
1.1.1 CELL
1.2 Needs/Wants
1.3 The basic economic problem
1.3.1 Scarcity
1.3.2 Opportunity Costs
1.4 Objectives
1.4.1 Individual
1.4.1.1 Max gains from working
1.4.1.2 Max purchasing power
1.4.2 Firms
1.4.2.1 Profit
1.4.2.2 Growth
1.5 Economic Systems
1.5.1 Planned
1.5.2 Mixed
1.5.3 Market
2 Statements
2.1 Positive
2.1.1 Facts
2.1.1.1 Can be tested
2.2 Normative
2.2.1 Opinions
3 Demand & Supply
3.1 Demand
3.1.1 Shifts
3.1.1.1 Price of other goods
3.1.1.1.1 Substitutes
3.1.1.1.2 Compliments
3.1.1.2 Compliments
3.1.1.2.1 Joint Demand
3.1.1.3 Change in consumer income
3.1.1.3.1 Normal goods
3.1.1.3.2 Inferior Goods
3.1.1.4 Fashion
3.1.1.5 Disposable income
3.1.1.6 Interest Rates
3.1.1.7 Legislation
3.1.1.8 Population
3.1.1.9 Exceptions
3.1.1.9.1 Ostentatious Consumption
3.1.1.9.1.1 Luxury items
3.1.1.9.2 Speculative Demand
3.1.1.9.3 Giffen Goods
3.1.1.9.3.1 Highly inferior goods
3.1.2 relationship between buyers and suppliers
3.1.3 Types
3.1.3.1 Latent
3.1.3.1.1 Potential
3.1.3.2 Derived
3.1.3.2.1 Demand for X is linked to Y
3.1.3.3 Composite
3.1.3.3.1 More than one use
3.1.3.4 Effective
3.1.3.4.1 Supported by ability & willingness
3.2 Supply
3.2.1 The quantity of goods sellers are willing to sell at a given price
3.2.2 Types
3.2.2.1 Actual
3.2.2.2 Planned
3.2.2.3 Joint
3.2.2.3.1 Production of X leads to production of Y
3.2.2.3.1.1 Cattle > Beef & Leather
3.2.2.4 Competing
3.2.2.4.1 Production of X is linked to production of Y
3.2.2.4.1.1 Wheat/Biofuel
3.2.3 Shifts
3.2.3.1 Increase in costs (CELL)
3.2.3.2 Legislation
3.2.3.3 Technology
3.2.3.4 Productivity
3.2.3.5 Subsidies
3.2.3.6 Tax
3.2.3.6.1 Ad Valorem
3.2.3.6.1.1 VAT
3.2.3.6.1.2 % tax
3.2.3.6.2 Unit tax
3.2.3.6.2.1 per unit
4 Markets
4.1 Equilibrium
4.1.1 Demand = Supply
4.1.2 Excess Demand
4.1.2.1 Supply < Demand
4.1.2.2 Price above equilibrium
4.1.3 Excess Supply
4.1.3.1 Supply > Demand
4.1.3.2 Price below equilibrium
4.2 Competitive
4.2.1 Large numbers of buyers/suppliers
4.3 Functions of price
4.3.1 Signalling
4.3.1.1 Information
4.3.2 Incentive
4.3.3 Rationing
4.3.3.1 Allocation
4.4 Specialisation
4.4.1 Benefits
4.4.1.1 ^productivity
4.4.1.1.1 ^output
4.4.1.1.2 Lower Costs
4.4.1.1.3 More competitive
4.4.1.1.4 Growth
4.4.2 Limitations
4.4.2.1 Workers alienated
4.4.2.2 Regions may suffer if that industry declines
4.5 Production costs
4.5.1 Fixed
4.5.1.1 Rent
4.5.1.2 Salaries
4.5.1.3 Insurance
4.5.2 Variable
4.5.2.1 Raw materials
4.5.2.2 Labour
4.5.3 Economies of scale
4.5.3.1 As output rises costs decrease
4.5.3.1.1 Then rise (dis-economies of scale)
4.5.3.2 Internal
4.5.3.2.1 Management
4.5.3.2.2 Purchasing
4.5.3.2.3 Financial
4.5.3.2.4 Technical
4.5.3.2.5 Marketing
4.5.3.2.6 Risk bearing
4.5.3.3 External
4.5.3.3.1 Skilled labour pool
4.5.3.3.2 development which benefits all firms
4.5.3.4 Dis-economies of scale
4.5.3.4.1 Alienation of staff
4.5.3.4.2 Loss of communication
4.5.3.4.3 Management issues
5 Elasticity
5.1 Supply
5.1.1 Types
5.1.1.1 PES
5.1.1.1.1 (%ΔQS)/(%Δ£)
5.2 Demand
5.2.1 Factors
5.2.1.1 Price
5.2.1.2 Price of other goods
5.2.1.3 Income changes
5.2.1.4 Type of good
5.2.2 Types
5.2.2.1 PED
5.2.2.1.1 (%ΔQD) / (%Δ£)
5.2.2.2 XPED
5.2.2.2.1 (%ΔQD of A) / (%Δ£ of B)
5.2.2.2.1.1 Substitutes & Compliments
5.2.2.3 YED
5.2.2.3.1 (%ΔQD)/(%ΔY)
5.2.2.3.1.1 Neccessities & Inferior Goods
5.3 PED>1
5.3.1 Elastic
5.4 PED>∞
5.4.1 Perfectly Elastic
5.5 PED=1
5.5.1 Unitary Elastic
5.6 PED<1
5.6.1 Inelastic
5.7 PED=0
5.7.1 Perfectly Inelastic
5.8 Revenue
5.8.1 Inelastic
5.8.1.1 ^£ = ^Revenue
5.8.2 Elastic
5.8.2.1 \/£ = ^Revenue
6 Market Failure
6.1 Types
6.1.1 Complete
6.1.1.1 No supply
6.1.2 Partial
6.1.2.1 Wrong quantity supplied
6.2 Public Goods
6.2.1 Non-excludability
6.2.2 Non-rivalry
6.2.3 Free rider problem
6.2.4 eg. Lighthouses
6.2.5 Quasi public goods
6.2.5.1 eg. Toll roads
6.2.5.2 It may be possible to exclude
6.3 Merit Goods
6.3.1 Goods that would be under-consumed (from desirable levels)
6.3.2 eg. Vaccinations
6.3.3 Demerit goods
6.3.3.1 Goods that are over-consumed causing negative externalities
6.3.3.2 eg. Alcohol
6.4 Monopolies
6.4.1 Pure
6.4.1.1 No incentive to improve
6.4.1.2 Prices may be artificially high
6.4.1.3 High profits
6.4.2 Benefits/Costs
6.4.2.1 Economies of scale
6.4.2.2 R&D
6.4.2.3 Price setters
6.4.2.4 Barriers to entry
6.4.2.5 Price > marginal loss
7 Externalities
7.1 Consumption
7.1.1 Negative
7.1.1.1 MPB > MSB
7.1.1.1.1 Tax applied lowers MSC meaning MSB=MSC @ MSB Q
7.1.2 Positive
7.1.2.1 MSB > MPB
7.1.2.1.1 Subsidy raises MSC meaning MSB is demanded
7.2 Production
7.2.1 Positive
7.2.1.1 MPC > MSC
7.2.1.1.1 Subsidy to raise MPC to MSC
7.2.2 Negative
7.2.2.1 MSC > MPC
7.2.2.1.1 Taxation to reduce MPC to MSC
8 Government Intervention
8.1 Pure public goods
8.2 Closing the intervention gap
8.3 Dealing with negative externalities
8.3.1 Regulation
8.3.2 Taxation
8.3.3 Pollution permits
8.4 Price controls
8.4.1 Price controls
8.4.1.1 Price floors
8.4.1.2 Price ceilings
8.4.1.3 Buffer Stocks
8.5 Government Failure
8.5.1 Causes
8.5.1.1 Inadequate Information
8.5.1.2 Conflicting Objectives
8.5.1.3 Administration costs
8.5.1.4 Market Distortions
Show full summary Hide full summary

Similar

AS Philosophy Exam Questions
Summer Pearce
Cell Structure
megan.radcliffe16
Exchange surfaces and breathing
megan.radcliffe16
Using GoConqr to study Economics
Sarah Egan
Economics
Emily Fenton
GCSE Biology B2 (OCR)
Usman Rauf
Computing Hardware - CPU and Memory
ollietablet123
Unit 1 flashcards
C R
AS Chemistry - Enthalpy Changes
Sarah H-V
Biology B1.1 - Genes
raffia.khalid99
Pathos in Battle
mouldybiscuit