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Introduction to microeconomics - Coggle Diagram
Introduction to microeconomics
Agents: Government, firm, household/individual
Economic problem: using limited resources to satisfy unlimited wants; we must choose which of our wants to satisfy
Types of markets
Markets for goods and services
Markets for factors of production
Financial markets
Basic questions
What to produce?
How to produce?
For whom to produce?
Economic systems
Command economy: the government determines what, how and for whom goods and services are produced
Market economy: Businesses and consumers decide what they will produce and purchase and in what quantities
Mixed economy: combination of a market and a command economy
Branches of economics
Macroeconomics: the study of economy-wide phenomena, including inflation, unemployment and economic growth.
Microeconomics: the study of how buyers and sellers make decisions and how they interact in market
Approach in Economics
Positive analysis: factual analysis, the analysis of " what is"
Normative analysis: opinion-based analysis, the analysis of " what should be"
Model
methods for decision making: qualitative method; quantitative method
Components of an economic model: theory, assumption, equation, data
Economists roles
Scientist: try to explain the world
Policy advisors: try to improve the world