Economics Unit 1

Lauren M
Mind Map by , created almost 6 years ago

GCSE Economics Mind Map on Economics Unit 1, created by Lauren M on 12/23/2013.

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Lauren M
Created by Lauren M almost 6 years ago
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Economics Unit 1
1 BASIC ECONOMIC PROBLEM
1.1 Infinite wants and limited resources
1.1.1 Needs
1.1.1.1 Something essential to survival
1.1.2 Wants
1.1.2.1 Something you would like to have but is not essential to survival
2 FACTORS OF PRODUCTION
2.1 Land
2.1.1 The natural resources used to produce goods and services
2.1.1.1 The land Itself
2.1.1.2 Seas and rivers
2.1.1.3 Buildings
2.2 Labour
2.2.1 The people to be workers
2.2.1.1 Unemployment
2.2.1.2 Education
2.3 Capital
2.3.1 Money
2.3.1.1 Recession
2.3.1.2 Factories and machinery
2.4 Enterprise
2.4.1 Individuals willing to have ideas and take a risk
2.4.1.1 Run a business
2.4.1.2 Education
3 OPPORTUNITY COST
3.1 The next best alternative foregone when making a choice - what we give up
3.1.1 Leisure vs work
3.1.2 Sweets vs clothes
3.1.3 One GCSE option over another
4 SECTORS
4.1 Primary
4.1.1 Where the extraction of raw materials takes place
4.1.1.1 Mining
4.1.1.2 Farming
4.1.1.3 Oil extraction
4.1.1.4 Forestry
4.1.1.5 Quarrying
4.2 Secondary
4.2.1 Where raw materials are manufactured into goods
4.2.1.1 Car manufacturing
4.2.1.2 Refining oil to petrol
4.2.1.3 Manufacture of electronic goods
4.3 Tertiary
4.3.1 The service sector
4.3.1.1 Banking
4.3.1.2 Tourism
4.3.1.3 Entertainment
4.4 Public
4.4.1 Not profit making
4.4.2 Provide a service
4.4.3 Positive externalities
4.4.3.1 All benefit
4.5 Private
4.5.1 Aim to make a profit
4.5.2 Increase sales
4.5.3 Expand
4.5.4 Survival
5 SPECIALISATION
5.1 The production of a limited range of goods by individuals, firms, regions or countries
5.1.1 Costs
5.1.1.1 To the firm
5.1.1.1.1 Cost of training workers
5.1.1.1.2 Expensive workers
5.1.1.1.3 Quality suffers
5.1.1.2 To the workers
5.1.1.2.1 Boredom
5.1.1.2.2 Skills may suffer
5.1.1.2.3 Replaced by machinery
5.1.2 Benefits
5.1.2.1 To the firm
5.1.2.1.1 More productive workers
5.1.2.1.2 Lower average costs
5.1.2.1.3 Production levels increase
5.1.2.2 To the worker
5.1.2.2.1 Higher pay
5.1.2.2.2 Skills are improved
5.1.2.2.3 More motivation, job satisfaction
6 MONEY
6.1 Medium of exchange
6.2 Store of value
6.3 Unit of account
6.4 Standard for deferred payment
7 DEMAND AND SUPPLY
7.1 Demand
7.1.1 Movement along the curve
7.1.1.1 Expansion
7.1.1.1.1 Expansion moves to the right on the curve
7.1.1.1.2 Price of goods falls, greater quantity demanded
7.1.1.2 Contraction
7.1.1.2.1 Contraction moves to the left
7.1.1.2.2 Price rises, lower quantity demanded
7.1.2 Shifts
7.1.2.1 What causes them?
7.1.2.1.1 Population
7.1.2.1.2 Advertising
7.1.2.1.3 Substitute
7.1.2.1.4 Incomes
7.1.2.1.5 Fashion
7.1.2.1.6 Interest rates
7.1.2.1.7 Complementary goods
7.1.2.2 To the right
7.1.2.2.1 Increase in overall level of demand
7.1.2.3 To the left
7.1.2.3.1 Decrease in overall level of demand
7.2 Supply
7.2.1 Shifts
7.2.1.1 What causes them
7.2.1.1.1 Productivity
7.2.1.1.2 Indirect taxes
7.2.1.1.3 No. of firms in market
7.2.1.1.4 Technology
7.2.1.1.5 Subsidies
7.2.1.1.6 Weather
7.2.1.1.7 Costs of production
7.2.1.2 Down/towards
7.2.1.2.1 Increase in supply (right)
7.2.1.3 Up/away
7.2.1.3.1 Decrease in supply (left)
8 ELASTICITY
8.1 Inelastic
8.1.1 Less than 1
8.1.2 Perfect= vertical
8.2 Elastic
8.2.1 More than 1
8.2.2 Perfect= horizontal
9 P.E.D
9.1 Price elasticity of demand
9.2 1. % change in quantity demanded
9.2.1 (change in quantity / original quantity) x 100
9.3 2. % change in price
9.3.1 (change in price / original price) x 100
9.4 3. Final stage
9.4.1 % change quantity / % change price
10 COSTS
10.1 Fixed
10.1.1 Do not vary with output
10.1.2 Pay the same no matter how much you produce
10.1.3 E.g
10.1.3.1 Rent
10.1.3.2 Interest on loans
10.1.3.3 Marketing
10.2 Variable
10.2.1 Vary with output
10.2.2 The more you produce the higher your variable costs
10.2.3 E.g
10.2.3.1 Petrol
10.2.3.2 Raw materials
10.2.3.3 Packaging
11 MONOPOLIES
11.1 Monopoly
11.1.1 100% market share
11.2 Monopoly power
11.2.1 25% market share
11.3 Benefits
11.3.1 Consumer protection
11.3.2 Efficient
11.3.3 Lower unit cost
11.3.3.1 Lower prices
11.3.4 New products
11.3.5 Patent
11.4 Costs
11.4.1 Less choice
11.4.2 Charge higher prices
11.4.3 Undercut local competition
11.4.4 no incentive
11.4.4.1 Increase efficiency or quality
12 ECONOMIES OF SCALE
12.1 Purchasing
12.1.1 Price reductions as bulk buys
12.2 Risk - bearing
12.2.1 Spread over more outlets, factories and products
12.3 Finance
12.3.1 Bank lend at lower rate
12.3.1.1 Company more likely to pay back
12.4 Technical
12.4.1 Machinery
12.4.1.1 Increase productivity
12.5 Managerial
12.5.1 Specialist managers
12.5.1.1 More efficient
12.6 Lower average cost per unit
12.6.1 Firm can lower price
12.6.1.1 Firm becomes more competitive
12.7 DISECOMOMIES OF SCALE
12.7.1 Loss of control
12.7.2 Lack of Co-ordination
12.7.3 Lack of co-operation
12.7.4 Increase average unit cost
12.7.4.1 profits reduce
12.7.4.1.1 Prices increase
12.7.4.1.1.1 Less competitive

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