Basic Economic Problem

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  • Basic Economic Problem
    • Factors of Production
      • Land
        • natural
          • oil, wood, fruit
      • Labour
        • human
          • teacher, shop assistant
      • Capital
        • man-made
          • truck, screw driver
      • Enterprise
        • organise all 3
          • Lord Sugar
    • Mobility
      • Geographical
        • resources moved area/location
      • Occupational
        • resources used in more than one job
    • Opportunity Cost
      • Limited resources, unlimited wants
        • Have to make choices
          • Other choice is next best alternative
    • Needs and Wants
      • Want
        • Something people would like to have in order to make life more comfortable.  Not necessary for survival
          • iPhone, TV
      • Need
        • Something people have to have in order to survive
          • food, shelter, warmth
    • Goods and Services
      • Good
        • tangeable, can be touched
          • computer, paper
      • Service
        • intangeable, when someone does something for someone else
          • Haircut, waiter
    • Consumer and Capital Goods
      • Consumer
        • Satisfy consumers' wants
          • TV,  food, computer
      • Capital
        • help to produce other goods/services
          • lorry, drill, PC
    • Durable and non-durable
      • Durable
        • used over and over again
          • TV, car
      • non-durable
        • Used up, perishable
          • food, drink, washing up liquid
    • Market Systems
      • Free market
        • Private ownership
          • anyone can produce whatever is needed to carry on business.  Assets bought and sold whenever wanted.
        • Freedom of choice
          • everyone free to choose own job and what they want to buy
        • Competition
          • firms compete with one and other for business, having obtained it they cannot ever be sure for the future
        • Free market
          • where buyers and sellers meet to exchange goods and services, not always physical place - TV, auctions
      • Planned economy
        • Planned Production
          • national plan involves setting targets for industries
        • Prices
          • prices are not free to change due to changes in demand and supply, prices are fixed by government
        • Profit
          • goods and services not produced in prospect of making profit, businesses produce what government thinks the people want
        • Public ownership
          • government owns means of production
      • Mixed economy
        • mix of free market and planned economy
          • Individals make many decisions but government interveres
            • Providing public and merit goods
            • Providing employment and support
            • Prevent pollution
            • place laws
    • Public and merit goods
      • Public
        • Provided by government
          • Non-rivalry
            • one person or group of people using service or good does not stop others from using and benefiting from it
          • Non-excludability
            • one person or group of people using the good or service does not stop others from using it
      • Merit
        • felt to benefit society, if left to private sector would be under-provided and under-consumed
    • Private and Public sector
      • Public
        • organisations and firms owned by members of general public
      • Private
        • organisations and firms owned by government

Comments

TomCorf

This might be the most epic mindmap I've ever seen on Get Revising!

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