Unit 1: What is Economics?
by Megan Lucas
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