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The Economic Problem by Mind Map: The Economic Problem

1. The Production

1.1. Opportunity cost

1.2. It is the proportion of sacrifice of one good for the production of another.

1.2.1. When it occurs over the production possibilities frontier, the cost is lower and translates into ..

1.3. Marginal Cost.

1.4. It is the cost for each unit produced.

1.5. A greater production of products creates a trade of specialization


3. Production should be assigned to the variables that are directly involved in future production and development so that its opportunity cost is high at present

3.1. The obtaining of the profits that the trade offers happens when the production specializes in the product or service that each one has with comparative advantages and benefits in the exchange

4. Efficiency

4.1. marginal benefit

4.2. Maximum amount that people are willing to pay for a good

4.3. It depends directly on the variety, that is to say that the more consumption more they "get fed up" with that product and are willing to pay less, but when the product is scarce, the market is willing to pay more.

5. The efficiency of the allocation is when it is marginal cost is equal to the marginal benefit.

5.1. Efficiency is in recognizing the comparative advantages of the company against the absolute advantages to combine in the profits of the trade

5.2. A person has an absolute advantage when he has the exact knowledge and skills for the production of a product while a comparative advantage is for example when a person can produce at a lower cost.

6. Economic Institutions

6.1. economic coordination happens when companies, markets and money coordinate decisions to adjust prices according to their supply and demand

6.2. The economic coordination is given with the planning, specialization within a free market that allows competitiveness.

7. Economic growth

7.1. economic growth occurs when more is invested in technological research than in the production of goods and services

7.2. Since there is more production of goods and services and less technological development, the possibilities of production in the future would be the same as the present because there is no specialization.