Introduction to Economics

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XII Economics (Introduction to Microeconomics) Mind Map on Introduction to Economics, created by Grace Prince on 29/05/2017.
Grace Prince
Mind Map by Grace Prince, updated more than 1 year ago
Grace Prince
Created by Grace Prince over 7 years ago
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Resource summary

Introduction to Economics
  1. WHAT IS ECONOMICS?
    1. Oikonomia
      1. Oikos - household
        1. Nomos - laws/management
          1. greek
            1. A social science which is concerned with the efficient use and proper utilisation of limited resources for the achievement of economic growth
              1. (i) Kautilya, Arthashastra: eco & pol activities
                1. (ii) Adam Smith, An Enquiry into the Nature and Causes of Wealth of Nation (1776): science of wealth
                  1. (iv) Alfred Marshall: study of mankind in the ordinary business of life
                    1. (iii) Lionel Robbins, Nature and Significance of Economics Science: study of human behaviour as a relationship between ends and scarce means which have alternative uses
                2. WHAT IS AN ECONOMY?
                  1. A system which provides livelihood to the people by producing goods and services that enable them to earn their incomes
                    1. WHAT ARE THE TYPES OF ECONOMIES?
                      1. BASED ON
                        1. Means of Production
                          1. CAPITALIST
                            1. "Market Economy"
                              1. maximise profit
                                1. operated by market demand and supply forces w/o direct intervention of govt.
                                  1. no limit to private ownership
                                    1. UK, USA, Australia
                            2. SOCIALIST
                              1. "Planned Economy"
                                1. maxmise social welfare
                                  1. operated by govt. w/ central planning authority
                                    1. private ownership under control of govt.
                                      1. China, Russia, Cuba
                              2. MIXED
                                1. "Dual Economy"
                                  1. govt. aim: social welfare max. private aim: profit max.
                                    1. operated by both govt. and private sector
                                      1. partly owned govt. & partly owned private
                                        1. India, Pakistan, Sri Lanka
                                2. AKA
                                  1. OBJECTIVE
                                    1. OPERATION
                                      1. OWNERSHIP
                                        1. EXAMPLES
                                3. Economic Development
                                  1. DEVELOPED
                                    1. per capita income HIGH & standard of living HIGH
                                      1. USA, Switzerland, Canada
                                    2. DEVELOPING
                                      1. per capita income & standard of living NOT V HIGH NOT V LOW
                                        1. India, Pakistan, Sri Lanka
                                      2. UNDERDEVELOPED
                                        1. per capita income is V LOW & standard of living is V LOW
                                          1. Nepal, Bangladesh, Bhutan
                                4. WHAT IS THE ECONOMIC PROBLEM?
                                  1. PROBLEM OF CHOICE
                                    1. CAUSES
                                      1. UNLIMITED HUMAN WANTS
                                        1. LIMITED/SCARCE RESOURCES
                                          1. ALT. USES
                                            1. URGENCY OF WANTS
                                            2. ON THE BASIS OF
                                              1. MICROECONOMICS
                                                1. PROBLEM OF ALLOCATION OF RSS
                                                  1. WHAT TO PRODUCE AND HOW MUCH?
                                                    1. economy can't produce all and must decide: civil/military, consumer/capital
                                                    2. HOW TO PRODUCE?
                                                      1. which tech used: LABOUR INTENSIVE TECH/CAPITAL INTENSIVE TECH
                                                        1. LIT: India uses bc labour is cheap and abundant (handloom industries)
                                                          1. CIT: America uses bc capital is abundant (power loom industries)
                                                        2. FOR WHOM TO PRODUCE?
                                                          1. personal distribution based on income of individual
                                                            1. functional distribution among owners of diff factors of production in the form of wages, rent, interest, profit.
                                                          2. MACROECONOMICS
                                                            1. branch of eco. deals w/ aggregate economic units
                                                              1. determine aggregate output, national income and employment in economy
                                                                1. aggregate demand and aggregate supply
                                                                  1. general equilibrium analysis
                                                                    1. aggregate demand, aggregate supply and national income
                                                              2. FULLER UTILISATION OF RSS
                                                                1. ltd. rss to full satisfy maximum wants, production max & wastage min
                                                                2. ECONOMIC GROWTH
                                                                  1. investment-resources available-capacity for production. Therefore: ++investment = ++rss utilised efficiently = growth in economy
                                                                3. branch of eco. deals w/ individual economic units
                                                                  1. optimum utilisation of limited rss for maximum production
                                                                    1. demand and supply
                                                                      1. deals w/ partial equilibrium analysis
                                                                        1. individual demand and individual supply
                                                                4. MEANING
                                                                  1. OBJECTIVE
                                                                    1. DETERMINANTS
                                                                      1. METHOD OF STUDY
                                                                        1. EXAMPLE
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