Economics 1

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  • Created by: Gabrielle
  • Created on: 29-12-13 15:42
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  • Business Environment
    • 1.) Decision making involves trade offs
      • Technical, productive, allocative and social efficiency
    • 2.) Involves Opportunity costs - the cost of something forgone
    • 3.) People and businesses think at the margin --> marginal costs
    • 4.) People respond to incentives
    • 5.) Trade can make everyone better off
    • 7.) Governments can improve market outcomes
      • Market Failure
        • Externalities
          • Market Power
    • 6.) Markets are a good way to organise economic activity
    • 8.) An economy’s standard of living depends on its ability to produce goods and services
      • GDP per head
    • 9.) Prices rise when the government prints too much money
      • Inflation
    • 10.)Society faces a short-run trade-off between inflation and unemployment
      • Phillips Curve

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