Unit 1: What is Economics?

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Unit 1: What is Economics? by Mind Map: Unit 1: What is Economics?

1. Economic Systems

1.1. Market Economy

1.1.1. people make economic decisions. individuals determine the questions of economics

1.2. Traditional Economy

1.2.1. uses habits, customs, and religion to determine the questions of economics

1.3. Command Economy

1.3.1. government makes the economic decisions. They own the land and capital

1.4. Mixed Economy

1.4.1. most economic are mixed

2. Basic Economics

2.1. Studies of Economics

2.1.1. Mircoeconomics

2.1.2. Macroeconomics

2.2. Ways to Look at the Economy

2.2.1. Positive Economics

2.2.2. Normative Economics

3. Economic Problems

3.1. Scarcity

3.2. Shortage

4. Needs and Wants

4.1. Goods

4.2. Services

5. Factors of Production

5.1. Land

5.2. Labor

5.3. Capital

5.4. Entrepreneur

6. Economic Questions

6.1. What

6.1.1. goods are services should be produced?

6.2. How

6.2.1. should goods and services be produced?

6.3. Who

6.3.1. should receive the goods and services?

7. Markets

7.1. Factor Market

7.1.1. where services of the factors of production are bought and sold

7.2. Product Market

7.2.1. where goods and services produced by businesses are sold to households

8. Efficiency

8.1. Productive Efficiency

8.1.1. utilizing all of its resources efficiently. maximum production

8.2. Allocative Efficiency

8.2.1. producing only types of goods and services that are more desirable while in high demand

9. Production Possibility Curve

9.1. Economic Growth

9.1.1. Outward Shift

9.1.1.1. Technology

9.1.1.2. New Resources

9.1.1.3. Capital Accumulation

9.2. Economic Loss

9.2.1. Inward Shift

9.2.1.1. Loss of Resources

9.2.1.2. War

9.2.1.3. Natural Diseaster

9.2.1.4. disease

10. Opportunity Cost

10.1. the best alternative we forgo when we make a choice or a decision

10.1.1. Constant Opportunity Cost

10.1.2. Increasing Opportunity Cost

11. Trading

11.1. Comparative Advantage

11.1.1. if one person has an opportunity cost of performing a task is lower than the other's

11.2. Absolute Advantage

11.2.1. the ability to produce a good or service at a lower cost per unit than the cost of another entity

11.3. The Principle of Comparative Advantage

11.3.1. everyone does best when each person concentrates on the activities for which his or her opportunity cost is lowest

12. The "isms"

12.1. Capitalism

12.1.1. laissez-faire - freedom. the government minimizes its interference with the economy but the government will step in to place legal restrictions on free enterprise

12.2. Communism

12.3. Socialism

13. Free Enterprise System

13.1. Main Role

13.1.1. to protect citizens. regulations

13.2. Principles

13.2.1. Voluntary Exchange

13.2.2. Entrepreneurship

13.2.2.1. Profit Motive

13.2.3. Private Property Rights

13.2.4. Competition

13.2.4.1. Specialization

14. Goals of Free Enterprise

14.1. Economic Freedom

14.2. Full Employment

14.3. Efficiency

14.4. Economic Equity

14.5. Economic Security

14.6. Price Stability

14.7. Economic Growth