Please enable JavaScript.
Coggle requires JavaScript to display documents.
INTRODUCTION (TEN PRINCIPLES OF ECONOMICS (People Face Trade-offs., The…
INTRODUCTION
-
-
-
-
STATEMENTS
Positive statements are statements that attempt to describe the world as it is.
Called descriptive analysis.
-
-
-
Microeconomics is the branch of economics that considers the behaviour of decision takers within the economy, such as individuals, households and firms.
-
Economics is the study of how societies produce and distribute goods in an attempt to satisfy the wants and needs of their members.
-
Interdependence(the norm) occurs because people are better off when they specialize and trade with others.
Comparative advantage and differences in opportunity costs are the basis for specialized production and trade.
Trade can benefit everyone in a society because it allows people to specialize in activities in which they have a comparative advantage.
ADVANTAGES
COMPARATIVE ADVANTAGE
-
-
-
The producer who has the smaller opportunity cost of producing a good is said to have a comparative advantage in producing that good.
ABSOLUTE ADVANTAGE
The producer that requires a smaller quantity of inputs to produce a good is said to have an absolute advantage in producing that good.