Unit 1: Principles of Economics

Mind Map by , created about 6 years ago

Mind Map on Unit 1: Principles of Economics, created by tetemelonfruit on 09/06/2013.

Tags No tags specified
Created by tetemelonfruit about 6 years ago
Edexcel: Additional Sciences - Biology: Topic 1 (The building blocks of cells)
Joe Barry
U1 Topic 1 : The periodic table
Dannie Couture
Edexcel, AS Biology, Risk Factors of CVD Quiz
Ella Middlemiss
Regular Verbs Spanish
Oliver Hall
Edexcel Biology Topic 1 and 2 AS
Emily Carson
National 5 Biology-Cell Structure
AS ICT - Topic 1: Data, Information and Knowledge
Atomic structure and the periodic table
Brodie McMeowface
Blogging for Exam Prep
Unit 1: Principles of Economics
1 Trade Offs: All trade is voluntary
1.1 Opportunity Cost: What is given up in order to get something else
1.1.1 PPF: Production Possibility Frontier Economic Growth Economic Models Competitive Market: there are so many people in the market that no single person affects the price of a good Inefficient Market: A market that does not use all resources available so resources are wastes Market Failure: When the individual pursuit of self-interest lead to bad results for society as a whole Efficient Market: A market that uses up all resources and where people can be better or worse off
1.2 Supply and Demand
1.2.1 Supply curve Movement along the supply curve Price Shifts in the Supply Curve 1. Change in input prices 2. Change in price of related goods/services 3. Changes in technology 4. Changes in expectations 5. Changes in number of producers Supply Schedule
1.2.2 Demand Curve Shifts in the demand curve 1. Change price of related goods 2. Change in income 3. Changes in taste 4. Changes in expectations 5. Changes in number consumers Movement along the demand curve Price Demand Schedule
1.3 Gains from Trade
1.3.1 Comparative Advantage: occurs when one country has a lower opportunity cost for a good than another country for the same product
1.3.2 Absolute Advantage: occurs when country that has the ability to make more of a good because it has more resources
2 Resources are scarce leading people to make desicions
3 Incentives
3.1 People usually exploit opportunities to make themselves better off
4 Marginal Thinking
4.1 Do I drink coffee or have a cup of juice??
5 Trade creates value
6 Markets Move Toward Equilibrium
6.1 Surplus: there is more of a product produced that consumers demand
6.2 Shortage: there is more demand for a product than is produced by sellers
6.3 Total Surplus
6.3.1 Consumer Surplus Willingness to pay The difference between the sell price and the amount a consumer is willing to pay
6.3.2 Producer surplus: Willingness to sell the different between the sell price and the amount the producer is willing to sell
6.4 The area on a supply and demand curve where they intersect or the space on the schedule where the price is the same for quantity demanded or supplied and the demand and supply