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Economics 1.1.1 to 1.2.4 - Coggle Diagram
Economics 1.1.1 to 1.2.4
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Opportunity Cost
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Free Goods
Unlimited in supply, no opportunity cost, no value attached
Economic Goods
Always have an opportunity cost, limited in supply, have an attached value.
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The Economy
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They all have different wants, aims, opinions and needs
Economic Activity
Economic agents are individuals, firms and governments that partake in economic activity
Economic activity is the actions that involve the production,distribution and consumption of goods and services at all levels within society.
A recession occurs when there is a negative GDP for over 6 consecutive months.Wages/salaries decrease and unemployment rises.
Factors of production
Land
Natural resources, raw materials
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Economic incentives will provide economists with the information required to tell them what goods and services to produce
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Resources
Renewable
Renewable resources are ones that can be replenished e.g. solar, wind ,oxygen
Non-Renewable
Non-renewable resources are finite in supply and therefore will run out e.e.oil, gas
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Functions of money
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Unit of account
prices,makes transactions transparent
PPF
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Shows the maximum possible output combinations of 2 goods/services an economy can achieve when all resources in an economy are efficiently employed
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Price mechanism
The means by which the forces of supply and demand determine the the prices and quantities of goods and services offered for sale in a free market
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Supply and Demand
Demand
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As price increases, there is a contraction in demand
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Supply
Is the amount of a product a producer is willing and able to sell at a specific price at a specific point in time.
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Price determination
Market forces are always pushing towards equilibrium - the price at which demand equals supply so there are no products left in the market
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