Introducing Economics

The Economic Problem
1. Scarcity
  1. Unlimited Wants
  2. Limited Resources
    1. Choices
      1. Opportunity Cost
        Next best alternative
The Coordination Problem
1. Market Economy
  1. Market Forces
2. Centrally Planned Economy
  1. State allocation
3. Mixed Economy
  1. Price Signals
  2. Government direction
Factors of Production
1. Labour
  1. Human Resource
2. Land
  1. Natural Resources
    1. Raw Materials
      1. Renewables
        Forests
      2. Non-renewables
        Oil
        Coal
3. Capital
  1. Produced Resources
    1. Stock of past production
      1. Aid current production
    2. Factory Buildings
    3. Transport Equipment
    4. Machinery
4. Entrepreneurship
  1. Human Resource
    1. Organises production
    2. Identifies projects
    3. Bears risk
Models and Assumptions
1. Model
  1. Simplified respresentation
Production Possibility Curve
1. Curve
  1. Maximum Combinations
    1. Given time
      1. Allocated resources
2. On the PPC
  1. Full use
    1. Efficient
3. In the PPC
  1. Unemployment
    1. Inefficient
4. Beyond the PPC
  1. Unattainable
Specialisation
1. Adam Smith
  1. Division of Labour
    1. More Productive
      1. Specialising
        Stages
2. Greater possibility of trade
3. Gains
  1. Differences
    1. Opportunity Cost
Markets
1. Arrangements
  1. Allow Transactions
Money and Exchange
1. Barter Economy
  1. Inefficient
  2. Importance of Money
2. Money
  1. Medium of Exchange
  2. Store of Valiue
  3. Unit of Account
  4. Deferred Payment
Microeconomics and Macroeconomics
1. Microeconomics
  1. Individual decisions
    1. Consumers
    2. Producers
2. Macroeconmics
  1. Interactions
    1. Economic Variables
      1. Aggregate
Positive and Normative Statements
1. Positive Statements
  1. What is
2. Normative Statements
  1. What ought to be

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Introducing Economics

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	Created by sarahsing over 10 years ago