AQA AS Economics Unit 1 MindMap
- Created by: ella
- Created on: 13-01-13 13:20
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- The Economic Problem
- Central purpose of an economic activity is to improve ECONOMIC WELFARE
- Positive Statements = FACTS
- Normative Statements / Value Judgements = Opinion
- Scarcity arises because there are insufficient resources to provide for everyone's wants. It forces us to make choices over the use of our limited resources to provide for our material needs.
- Consumer Goods = Goods brought for consumption
- Capital Goods = Goods brought in order for a firm to produce other goods e.g. machinery
- We must choose WHAT we produce, HOW we produce it and for WHOM we produce it.
- Free Goods = Are not brought and sold at a priceas they're not scarce and no costs of production are involved.
- Economics Goods = Have no opportunity cost,.
- FACTORS OF PRODUCTION: Land, Labour, Capital, Enterprise
- ECONOMIC OBJECTIVES: Profit, Utility, Public Interest / Social Welfare
- PRODUCTION POSSIBILITY FRONTIER shows the max level of output for two goods or services that an economy can achieve when all its resources are full and efficiently employed.
- Any point on the PPF curve indicates effiecient allocation of resources, since none are being wasted. if the economy ise located within its PPF, there is an inefficient allocation of resources.
- An outward shift in the PPF shows economic growth, and inward shift shows a decrease in the potential output of an economcy, possibly due to a natural disaster.
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