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Unit 1Economics, Unit 1 Economics, Unit 1 Economics - Coggle Diagram
Unit 1Economics
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Factors of production
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Land
This includes the land itself, everything that is under and above the land and everything that is found in and under the sea
Entrepreneurship
This is a special human skill, possessed by some people, involving the ability to develop new businesses by organising the other three factors of production – land, labour and capital – to produce goods and services, and taking the risks of success or failure of the business, as profit is not guaranteed and investment may be lost.
Opportunity cost
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economic goods
esources, and therefore have an opportunity cost and a price; for example, a computer or apples.
free goods
Goods that are not produced with scarce resources, do not have an opportunity cost, and therefore do not have a price; for example, air, sunlight and rainwater.
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Economics
is a social science that studies how human beings use their limited resources to satisfy their infinite needs and wants and how they improve their economic well-being. People cannot have everything they desire, and that is where economics comes in.
Microeconomics
The area of economics that studies the behaviour of individual economic agents, such as households, firms, industries and the government, and how they make economic decisions.
Macroeconomics
The area of economics that studies the economy as a whole, focusing on the 'aggregates' of the economy and on countries' fundamental economic goals in relation to several main variables: economic growth, employment, price stability, external stability and income distribution.
models
Goods that are not produced with scarce resources, do not have an opportunity cost, and therefore do not have a price; for example, air, sunlight and rainwater.
PPC
The curve that shows the maximum combination of goods a country can produce in a specific period of time, using all of its resources and the available technology in the most efficient way. It is also called the production possibility frontier.
efficiency
Efficiency refers to improved resource use. It is where a firm can produce the same good, but with fewer resources.
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Unit 1 Economics
leakages
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taxes
payments that have to be made to the government which it then uses to provide public and merit goods to society.
imports
Goods and services produced by foreign countries and consumed by domestic households. They represent an outflow of domestic currency from the country.
potential
output
The total amount of goods and services that an economy can produce when all of its available resources are being used efficiently.
growth
When the production capacity of an economy increases from one period to another. It means that the maximum amount of output that an economy can produce when all of its resources are being used efficiently increases.
national
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output
The total value of goods and services that all firms from all industries of a country produce at a certain moment in time. It is usually measured by the GDP.
actual growth .
When an economy produces a greater amount of goods and services in one period of time than in a previous one.
opportunity cost
Opportunity cost refers to the second best alternative. The opportunity cost of the government paying a subsidy to a profit-making firm is all the other uses for that money, such as health care or education.
Capital goods
The tools and machinery necessary for the production of other goods. They are what we call the ’capital’ factor of production.
Consumer goods
Finished products that are ready for satisfying people’s wants, not used in any further production process.
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economic growth
When a country produces more goods and services in one period than in a previous one. It is usually measured by changes in the real GDP.
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exports
Goods and services that are produced by domestic firms and sold to foreign countries. They represent an inflow of foreign currency into the country
transfer payments
ransfer payments are a type of government expenditure that is not in exchanges for goods and services. Often, transfer payments are used to redistribute income and support the poor.
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Investment is the expenditure by firms on capital stock, such as building factories and purchasing machinery. It is the planned investment for expansion.
Unit 1 Economics
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policy
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fiscal
Fiscal policy is where the government adjusts government expenditure and/or taxation to stimulate the economy.
economy
linear
A way in which the flow of resources and goods in an economy works. It refers to a ‘take–make–dispose’ step-by-step system. This means that raw materials are collected, then transformed into products that are used until they are finally discarded as waste.
circular
A new way in which the flow of resources and goods in an economy works in contrast to the linear economy. It is based on the principles of ‘designing out’ waste and pollution, keeping products and materials in use, and regenerating natural systems, with the intention of making economic growth sustainable and preserving the environment.
Positive economics
Economics statements based on facts or evidence, free from subjectivity. They can be tested scientifically and proved or disproved.
Normative economics
Economic statements based on norms, and thus based on subjective evaluation. They cannot be proved or disproved scientifically.
political economics
An interdisciplinary branch of the social sciences that focuses on the interrelationships among individuals, governments, and public policy. It is the study of how economic theories play out in the real world. It is widely used to describe any government policy that has an economic impact.
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money supply
The total amount of money in circulation; it’s all the money individuals have available to spend at any given period of time. It consists of all of the coins, notes and bank balances and money available to consumers and producers to buy and sell goods.