Unit 1: What is Economics?

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

1. Economic Problems

1.1. Scarcity

1.2. Shortage

2. Needs and Wants

2.1. Goods

2.2. Services

3. Factors of Production

3.1. Land

3.2. Labor

3.3. Capital

3.4. Entrepreneur

4. Markets

4.1. Factor Market

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

4.2. Product Market

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

5. Production Possibility Curve

5.1. Economic Growth

5.1.1. Outward Shift Technology New Resources Capital Accumulation

5.2. Economic Loss

5.2.1. Inward Shift Loss of Resources War Natural Diseaster disease

6. Trading

6.1. Comparative Advantage

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

6.2. Absolute Advantage

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

6.3. The Principle of Comparative Advantage

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

7. Free Enterprise System

7.1. Main Role

7.1.1. to protect citizens. regulations

7.2. Principles

7.2.1. Voluntary Exchange

7.2.2. Entrepreneurship Profit Motive

7.2.3. Private Property Rights

7.2.4. Competition Specialization

8. Economic Systems

8.1. Market Economy

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

8.2. Traditional Economy

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

8.3. Command Economy

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

8.4. Mixed Economy

8.4.1. most economic are mixed

9. Basic Economics

9.1. Studies of Economics

9.1.1. Mircoeconomics

9.1.2. Macroeconomics

9.2. Ways to Look at the Economy

9.2.1. Positive Economics

9.2.2. Normative Economics

10. Economic Questions

10.1. What

10.1.1. goods are services should be produced?

10.2. How

10.2.1. should goods and services be produced?

10.3. Who

10.3.1. should receive the goods and services?

11. Efficiency

11.1. Productive Efficiency

11.1.1. utilizing all of its resources efficiently. maximum production

11.2. Allocative Efficiency

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

12. Opportunity Cost

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

12.1.1. Constant Opportunity Cost

12.1.2. Increasing Opportunity Cost

13. The "isms"

13.1. Capitalism

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

13.2. Communism

13.3. Socialism

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