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Ten principles of economics - Coggle Diagram
Ten principles of economics
what is economic?Economics is about weighing different choices or alternatives.
Society and Scarce Resources
When unlimited wants meet limited resources, it is known as Scarcity.
:
factors of production
Human resources: labour
Natural resources: land and raw materials
Manufactured resources: capital
Needs versus wants
We have limited resources to produce these goods and services we want.
Choice and opportunity cost
make decision due to scarcity, people face trade-offs - this means that choosing more of one thing can only be achieved by giving up something else in exchange.
Efficiency v. Equity
:
Efficiency means society gets the most that it can from its scarce resources
Equity means the benefits of those resources are distributed fairly among the members of society.
The principles of personal decision making are:
People face trade-offs.
The cost of something is what you give up to get it.
Rational people think at the margin.
People respond to incentives.