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(Factors of Production, Types of Economies, Equilibrium, Supply, Demand,…
Factors of Production
Capital
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Human
Any skills or knowledge gained by a worker through education, training, or experience
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Entrepreneurship
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
Types of Economies
Free Market
Capitalism, class divide and total freedom over money
Mixed Economies
Socialism, wealth is redistributed
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Equilibrium
Surplus
A condition in the market in which the quantity demanded is less than the quantity supplied at the existing price.
Because sellers are unable to sell as much of the good as they want, a surplus generally causes a decrease in the market price, which then acts to restore equilibrium.
Shortage
A condition in the market in which the quantity demanded is greater than the quantity supplied at the existing price. Because buyers are unable to buy as much of the good as they want, a shortage generally causes an increase in the market price, which then acts to restore equilibrium.
Where the desires of buyers and the desires of sellers perfectly align. Everyone who wants to buy the product at a certain price can find someone willing to sell it at that same price. Meaning that consumers who want the lowest price possible and producers who want the highest price possible are all satisfied.
Supply
The different quantities of a good that sellers are willing and able to sell (or produce) at different prices. The law of supply states that there is a direct (and positive) relationship between price and quantity supplied.
Demand
The different quantities of goods and services that consumers are willing and able to buy at different prices. The law of demand states that there is an inverse relationship between price and quantity demanded.
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Efficiency
Using resources in such a way as to maximize the production or output of goods or services, a driving force behind economic growth