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ECONOMICS (MARKET SYSTEM (decision making (buyers decide what to buy,…
ECONOMICS
MARKET SYSTEM
decision making
buyers decide what to buy
producers decide what to produce
alocation of resources change according the demand each product has
Brings toghether buyers and sellers
competition
rivals producing same type of good
helps to keep low prices
MARKET FAILURE :
INEFFICIENT
fail to produce what consumers want
fails to produce quantity rquired
fails to produce goods at low prices
not always produces desirable outputs
not producing
public goods
for all or for none
provided by the gobernment
police exchange
merit goods
substancial benefits
positive externl effect
PRIVATE AND SOCIAL COSTS AND BENEFITS
1ST CONSIDERATION OF A BUINESS
activities should be carried if the benefits are more than the costs
PRIVATE
costs
money needed to start the buisness
cost of building and equiping
employees
benefits
revenues earned
savings from estrategies
private benefits - priv costs = neet private benefit
externalities
external effect on making a decision
negative
positive
overall profit of an economic activity
(PRIVATE BENEFITS - EXTERNAL BENEFITS) - (PRIVATE COST - EXTERNAL COSTS)
CONFLICTS BETWEEN PRIVATE AND SOCIAL BENEFITS
decisions have an effect in STAKEHOLDERS
COMERCIAL BANKS
SAFE PLACE THT KEEPS AND LENDS MONEY TO FACILITATE PAYNMENTS SYSTEMS
MAIN ACTIVITIES
KEEPING MONEY SAFE
SAVING ACCOUNTS