Please enable JavaScript.
Coggle requires JavaScript to display documents.
Economics micro - Coggle Diagram
Economics micro
Production
-
individuals as producers
individuals can be producers of non market goods and services such as cleaning cooking and childminding - many of these producers may only work part time
other individuals are self employed and work directly for themselves - these individuals produce goods and services which enter the market
-
productivity
procutivity is one measure of the degree of efficiency in the use of the factors of production in the production process
-
-
-
-
what are total cost ,total revenue , average revenue, profit and loss
-
-
-
-
profit and loss
-
-
profit maximisation is one of the main aims of most firms. This occurs when there is the greatest dif between total rev and total cost
-
-
evaluating the importance of costs, revenue profit and loss for producers
costs
as seen, if total costs are less than total revenue then a firm makes a profit
-
Production costs generally rise as output increases , this means that as costs rise with quantity produced and supplied, so too does the supply price
revenue
Revenue
-
revenue is important because without enough inflow of money from sales, a producer cannot earn a profit and remain in business in the long run
-
Profit
Profit is important in a market economy bceause it signals to scarce resources to move to those firms making the most profit - this is because larger profits indicate most efficient use of resources
-
-
Loss
Loss it cannot go on making a loss, it will either run out of money or people who have lent money will demand repayment
-
-
Demand
Demand is the willingness and ability to purchase a good or service at the given price in a given period of time
important to note that they are willing and able - not effective demand unless someone wants to purchase and has the ability to do so
Demand can also come about due to the demand for another product when this happens its called derived demand
For example transport - most demand for transport is derived from the demand to commute to work, go on holiday or move goods from one place to another
for most goods - quantity demanded varies inversely with the price for example as price rises the quantity falls or as the price falls the quantity demanded rises
called law of demadn
comes about because as the price of a good or service falls consumers have more money left over so they cna buy more with the same amount of money
-
WHat is meant by market demand - the total demand for a good or service found by adding together all individual demands
-
susbidy - an amount of money the government gives directly to firms to encourage production and consumption
-
-
supply
supply is the ability and willingness of a firm to produce and provide goods and services at each price in a given time
for most goods and services, quantity supplied varies directly with price - as the price rises, the quantity increases vice versa
law of supply
comes about because
-
production cost are likely to rise as output expands so a higher price is needed to cover these exracosts
new firms may be attracted to the market becayse the higher prices mean they can cover higher production costs
-
-
analysing causes and consquences of shifts of, movements along the supply curve
the basic difference of the two us that movements along the supply curve are caused by a change in price, while a shift of the supply curve is caused by non price factors
-
-
-
competition
-
in a competitive market large numbers of producers compete with each other to satisfy the wants and needs of a large number of consumers
in a competitive market, No SINGLE producer, or groups of producers can decide how the market operates - equally, no individual consumer or group of consumers can determine the price and quantity of goods and services
-
-
-
-
-
Price
price is the sum of money you have to pay for a good or service, its determined between the interaction between supply and demand
Because we have scarce resources in the world, it is important we we have some way of pricing items based on their worth
worth - worth is how much you value something, it can vary between different people due to fashion or in different situation
-
-
-
market forces
what are market forces?
market forces are factors which determine price levels and the availability of goods and services in an economy without government intervention
-
-
-
The labour market
the labour market is where workers sell their labour and employers but the labour, it consists of househilds supply of labour and firmss demand for labour
-
-
-
-
-
-
-
-