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Economics and Business - Coggle Diagram
Economics and Business
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Economic systems
Traditional economy:
Producers are self-efficient, producing enough to survive, rather than aiming to make a profit. Money is not used.
Market capitalist economy:
Producers exchange goods and services with consumers in return for money. This takes place in a market (may or may not be physical). The majority of productive resources (land, labour, capital) are owned by individuals and farms.
Planned capitalist economy:
Individuals and firms own the productive resources but the government determines 'what to produce', 'how to produce' and 'for whom to produce'.
Market socialist economy: Productive resources are mostly owned by the government on behalf of the people of the country.
Planned socialist economy: Production takes place in the line with the government's long and short-term plans.
The Australian Economy
Resources:
- Natural resources
-Resources that come from nature, from above or below the ground.
- Labour resources
-The intellectual or physical skills of a worker that are needed to make a good or provide a service.
- Capital resources
-Man-made resources.
How to deal with Scarcity:
- Resources are limited, so we must make the best use of them.
- Opportunity cost- the cost of the next-best alternative use of resources.
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The Global Supply chain
-The many links or activities that are required to move a product or service from a supplier to a consumer around the world.
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Many companies outsource, using resources outside of their business, often overseas.
Why?
-Lots of reasons, but a huge one is that it is cheaper.
-Minimal hourly rate or minimum wage in Australia.
Transnational Corporations in the supply chain:
- Transnational corporation
-A company that opparates in more than one country.