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Economics G9 Unit - Coggle Diagram
Economics G9 Unit
The Factors of Production
Land
All natural resources used to produce goods and services (Water, Plants, Minerals, Animals, etc)
Labour
All human effort in the production of goods and services
Capital
Physical Capital – Any human-made resource that is used to create other goods and services (tools, tractors, machinery, buildings, factories, etc.)
Human Capital – Any skills or knowledge gained by a worker through education, training, or experience
Entrepreneurship
The individual who does the act of organizing and combining the other factors of production to create goods and services that people will want to buy in the hopes of earning a profit.
The Basic Economic Problem
Economics- Social science concerned with the efficient use of scarce resources to achieve maximum satisfaction of economic wants.
Study of how individuals and societies deal with scarcity
Scarcity: the fundamental problem of having unlimited human wants in a world of limited resources
Economic systems
Mixed Market
A economic system similar to a free market, but with more government regulations to fix the issues faced in a free market. (the government provides welfare/protection/s)
The Allocation of Resources
Microeconomics and macroeconomics
Microeconomics: Branch of economics dealing with behaviour and decisions of smaller units like individuals and businesses.
Macroeconomics: Branch of economics dealing with economic theory and decisions of large bodies like the government.
Demand
Supply
Opportunity costs and the PPC
Trade offs
All the alternatives given up whenever we choose one course of action over another
Opportunity costs
the value of the second best option a person sacrifices when they choose one option over another
The PPC(Production Possibilities Curve)
A production possibilities curve (or frontier) is a model that shows alternative ways that an economy can use its scarce resources.
This model graphically demonstrates scarcity, trade-offs, opportunity costs, and efficiency
Significance of the PPC
Show how efficient an economy is
Show whether an economy has grown or shrunk
Show the opportunity cost of a decision to produce more of one good or service
Reading a PPC
Efficiency
Efficiency: using resources in such a way as to maximize the production or output of goods and services
Inside the PPC: When economies are inefficient, they are operating somewhere inside the frontier
Underutilization of resources
On the PPC: Production possibilities frontier represents economy operating at full efficiency
Outside the PPC: an economy can’t get there with current land, labor, and capital
Left Shifts: A country’s production capacity decrease
Equilibrium and Equity