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Theme 1 (Economics is a Social Science(Basics) (Factors that influence the…

- - - - Example:
        The rising price of crude oil on world markets will lead to an increase in cycling to work
  - - - Example:
        Pollution is the most serious economic problem
- - - - -Provide public goods
        -Control macroeconomics variables
        -Reduce negative externalities
        -Provide a legal framework
        -Encourage free trade
        -Regulate markets to reduce consumers exploitation and create compression
- - - - Drought
        Low supply of labour
        Limited land
        Deflation
        Depression
        War
        Failure to Invest
    - - Capital Equipment
        Recruit more labour
        Buy more land
        New production methods
        Division of labour
        Specialization
- - - - This will differ dependent upon the agent:
        -Households or consumers wish to maximise their utility or personal satisfaction
        -Firms wish to maximise profits
        -|Governments wish to maximise welfare of the population
  - - - The amount of additional satisfaction an individual derives from consuming on extra unit of a good or service
    - - The amount of satisfaction an individual derives from consuming a good or service
    - - The marginal benefit indicates, in dollar terms, what the consumer is willing to pay to acquire one more unit of the good; it can also be related to the height of an individual's demand curve. Another implication of the Law of Diminishing Marginal Utility is that the height of the demand curve will fall as more units of the good are consumed.
    - - Profit Satisficing-A level of profit below profit maximisation that satisfies the needs of the owner or managers of an organisation
        
        Medium Profits
      - Sales Maximisation-Some firms will seek to maximise sales,possibly gain market share
        
        Normal Profits/Growth
      - Profit Maximisation-Firms will seek to attain the highest level of profit available in their production of goods and services
        
        Largest Profits
      - Growth-Some firms will seek to maximise their growth potential. a business is selling as much as they can without making a loss. At the sales maximisation output, there are normal profits only and no supernormal profits/loss.