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UNIT 1 - Coggle Diagram

- - - - The lack of resoures to satisfy wants/needs
      - OPORTUNITY COST
        
        Because of scarcity you have to pick what to produce, it is the option you do not choose
- - - - study of individual markets, how they interact and the decisions they make
    - - Study of whole economy, large-scale that affect globally
  - - - POSITIVE- no opinion- facts
      - NORMATIVE- opinion- can not be proven
    - - "all other things remain equal"
      - to study cause-and-effect relationships w/o outside influences
    - - Analyzes small changes
      - helps understand the impact of increment changes
    - - SHORT RUN
        
        some imputs can change(minor ones) but others remain fixed
      - LONG RUN
        
        all factors of production can change
      - VERY LONG RUN
        
        Everything is variable(technology-regulation-social factors)
- - - - resources allocated through the forces of demand and supply
      - buyers and sellers make decisions based on prices
      - high demand(of a product) price rises
      - low demand, price fall
    - - goverment controls
      - excess demand, not enough goods(shortages)
      - limited variety, low quality goods
      - artificially low prices
    - - resources
        
        most privately owned
        
        some publicly controlled
      - allocation of resources influenced by
        
        market forces
        
        goverment policies
        
        intercations between firms, labor and the state
      - privatisation
        
        from public to private sector
      - increased inovation and efficiency
- - - - maximun output
      - trade-offs: + of 1 good, means - than another
      - what is possible to produce
    - - high income countries produce + and + variety
        
        abundant resources
      - low-income countries have limited production
        
        fewer,lower-quality resources
    - - constant oportunity cost
        
        ppc is a straight line
        
        more of good A, - than good B (in equal parts)
        
        resources are equally efficient for producing both goods
      - increasing opportunity cost
        
        ppc is curved(bowed outwards)
        
        producing + of good A, - and - of good B
        
        resources are not equally good at producing both goods. some are bettter suited for one task than the other
- - - - excludable
      - rivalrous
    - - non-excludable
      - non-rivalrous
    - - beaches-toll roads
      - depends
  - - - people benefit w/o paying
        
        no private incentive
        
        public goods may be underprovided
  - - - provide private and external benefits
    - - cause harm to individuals
  - - - individual freedom vs goverment responsibility to protect welfare