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Economics - Unit 1 - Coggle Diagram

- - - - Land
        
        Natural Resources
      - Entrepreneurship
        
        Special human skill to inovate
      - Labour
        
        Physical and mental efforts from people
        
        Types of labour
        
        Unskilled Labour
        
        Low Salary
        
        Skilled Labour
        
        High Salary
      - Capital
        
        Machinery and Man-made equipment
    - - Definition: Occurs when people have inaccurate data, hence make wrong decisions
      - Causes
        
        Complexity
        
        Unbalanced Knowledge
        
        Long-term consequences
        
        Price Information
      - Asymmetric Information
        
        Adverse Selection
        
        Prices are adjusted to the risk of health in health insurance
        
        Moral Hazard
        
        Occurs when insured consumers are likely to take greater risks, knowing that a claim will be paid for by their cover
  - - - Consumer Durable
      - Consumer Non-durable
      - Consumer Services
    - - Definition: Government-provided goods/services that everyone can use
      - Can lead to negative externalities if there is excessive use
        
        Affect all users
        
        Traffic Congestion
        
        Air Pollution
        
        Can be subjected to restrictions on access, but may be considered as club goods
      - Quasi-Public Goods
        
        Has many but not all characteristics of a public good
        
        Types
        
        Semi-non rival
        
        Available up to a point
        
        Example: If many people uses the park, it will eventually be crowded.
        
        Semi-non excludable
        
        Possible but difficult to exclude non-paying consumers
        
        Entrance Fees
        
        Toll Booths
- - - - Tertiary Sector
        
        Part of economy where businesses provide services
        
        Education
        
        Advertising
        
        Healthcare
        
        Transport
      - Quarternary Sector
      - Primary Sector
        
        Extracts and harvests products from the Earth such as raw materials and food.
        
        Agriculture
        
        Mining
        
        Forestry
        
        Fishing
      - Secondary Sector
        
        Manufacturers goods for customers
        
        Engineering
        
        Construction
        
        Automobile
  - - - Planned Economies
        
        Economies in which the course of economic activities is dictated by some central authority
        
        Advantages
        
        Focus on economic goods
        
        Proper infrastructure
        
        Everyone has access to goods
        
        Control demand goods
        
        Disadvantages
        
        Less choices for consumers
        
        Incentive to work is low
        
        Central planning is inefficient
        
        Misallocation of resources
      - Mixed Economies
        
        Economic activities are generally left to the free play of the market force, but the government exercises its control with a view to regulating them
        
        Advantages
        
        Increase national production
        
        Public and private sector work hard
        
        Public control problems solved
        
        Resources are all utilised
        
        Disadvantages
        
        Not helpful in achieving optimal use of resources
        
        Suffers from capitalism and socialism
        
        Halfway House
        
        Wastage of different types of resources
      - Market Economies
        
        Economies in which economic activities are left to the free play of the market forces
        
        Advantages
        
        Freedom of choice
        
        Market is quick to adapt
        
        Private ownership of property
        
        Incentive to work is high
        
        Disadvantages
        
        High chance of monopoly
        
        Inequality between rich and poor
        
        Unequal distribution of resources
        
        Market will only produce profitable goods
- - - - Shifts
        
        Inward Shift
        
        Economy inefficient
        
        Outward Shift
        
        Economy efficient