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Economics (Recession and Responses to Recession (Keynes vs. Hayek -…
Economics
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Basic Economics
Scarcity - the gap between limited resources, and limitless wants
Diminishing Marginal Utility - For each additional unit of a good, the satisfaction you receive from consuming the good decreases
Opportunity Cost - the loss of potential gain from other alternatives when one alternative is chosen
Incentives- Positive - When something you want is put on the line to ease you to do something.
Negative - when punishments are brought up in order to force you to do something
Unintended Consequences and Perverse Incentives- A perverse incentive is an incentive that has an unintended and undesirable result which is doesn't agree with the interests of the incentive makers.
Production Possibilities Frontiers - The PPF is a curve that shows all maximum output possibilities for two goods
Factors of Production - Land, Labor, and Capitalism
Micro vs. Macro - Macro is basically the behavioral trends of the economy, whereas micro is more the study of decisions that are made by people and businesses within the economy.
Marginal Analysis is an examination of the additional benefits of an activity compared to the additional costs given by that same activity.
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