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Capitalism - Coggle Diagram

- - - - Private property is secure with strong enforcement of the rule of law
      - Markets are competitive
      - When owners or managers of firms are not because of their talent but because of their connections.
  - - - They keep a price over the market equilibrium
      - They reduce the incentives for continuous innovation of better services or prices for the consumer.
    - - Keep incentives for competition and thus innovation
      - Best managers and firms surviving
      - Public policy that supports basic services not provided by firms
      - Help to keep a stable society, good environment, and resource base.
- - - - Individuals focus on one activity that can help them earn money
      - Difficulty
        
        People depend on others for the goods/ services they do not provide
        
        leads to division of labor
      - Leads to
        
        Cooperation
        
        Businesses help each other
        
        Competition
        
        Businesses try to get more consumers and money than the others
        
        Unintended cooperation on a global scale
        
        Trade
      - Advantage
        
        Comparative advantage
        
        When someone dedicates more time to what they have a more chance of producing so they can gain money, even though they are not the most efficient in the market.
        
        Absolute advantage
        
        Someone has a more efficient way to produce something than others.
    - - Helped firms and individuals be more productive
        
        Machines
        
        Internet
        
        Electricity
        
        Software
      - Thanks to the industrial revolution
- - - - People own things
        
        which means
        
        They can exclude others
        
        They can use them however they want to
        
        They can gain money from them
      - Examples
        
        Patents
        
        Own your own invention
        
        Capital goods
        
        Things used to make other goods
        
        Like machines!
    - - Ways of transferring goods or services from one person to another that are/ include
        
        Buying and selling
        
        Reciprocal
        
        Voluntary
        
        Mutual benefit
        
        Collaboration and competition
        
        Examples
        
        Shops
        
        Farmer's market
        
        Digital assets (stocks)
        
        Auctions
        
        Labour market
    - - Known as companies
      - Organization
        
        b) They pay salaries to worker
        
        c) Goods and services are property of the owners
        
        a) More than one person own the capital goods that are used in production
        
        d) The owners will sell them in the market to make a profit
      - Examples
        
        Schools
        
        Banks
        
        Apple (the store)
        
        Nike (sportswear store)
      - Central part of capitalism
        
        Where production happens!