Unit 1 Economics mindmap

A mindmap of unit 1 AQA Economics

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  • Unit 1 Economics
    • Demand
      • Types
        • Derived
          • A good demanded as a result of another good being demanded
        • Joint
          • Complement goods
        • Composite
          • A good used for more than once distinct use
      • Determinants
        • Advertising
        • Income
        • Price of other goods and services
        • Tastes
      • Income elasticity
        • %Change in QD divided by % Change in Income
        • How much of change in demand there is to a change in income
      • Price elasticity
        • Determinants
          • Substitutes
          • Luxury/ necessity
          • Income
          • Time
        • %Change in QD divided by % Change in price
    • Supply
      • Determinants
        • Cost of production
        • Price of other goods and services
        • Technology
        • Taxes and subsidies
      • Price elasticity
        • Formula
          • % Change in Quantity divided by % Change in Price
        • Determinants
          • Stock piling
          • Spare capacity
          • Production methods
          • Time
    • Government intervention
      • Regulation
        • Used against private goods to reduce the consumption of demerit goods
      • Subsidiesed provision
        • Firms producing merit goods being subsidised by the government
      • Direct provision
        • Government providing a merit good directly to the consumer, free of charge
    • Externalities
      • Negative
        • Demerit Goods
          • Overproduced  in the free market
          • Overconsumed in the free market
        • Social cost more than private cost
        • Private benefits is more than social benefits
      • Positive
        • Merit Goods
          • Underproduced in free market economy
          • Underconsumed in the free market
        • Private costs are more than Social costs
        • Social benefits is more than Private benefits
    • Types of goods
      • Inferior
        • Demand decreases when income increases
      • Normal/ economic
        • A good with scarce resources and a opportunity cost
      • Free
        • A good which has unlimited resources
        • There is no opportunity cost
      • Public
        • A good not produced at all in the free market
        • Non-rivalry and non excludability
      • Merit
        • Positive externalities
        • Underproduced and under consumed in free market
      • Demerit
        • Negative externalitites
        • Overproduced and overconsumed in the free market
    • Monopolies
      • Natural
        • Extremely large economies of scale
        • Being truly efficient so extremely high barriers of entry
      • One firm supplies all output in the economy
      • High barriers to entry
      • Government intervention
        • Breaking up the monopoly
        • Reduce barriers of entry
        • Price control
    • Taxes
      • VAT
        • Value Added Tax
        • Levied on a proportion of the good
      • Excise duties
        • Specific tax which doesn't change with price
    • Market failure
      • When goods are over or under produced or consumed
        • Causing excess demand or supply
      • Complete
        • When a free market fails to provide a good at all
          • Public goods
    • Economies of scale
      • When a firm expands and/or increases efficiency and/or revenue
    • Diseconomies of scale
      • When a firm expands too much and gets inneficient
      • Loss of communication
      • Lack of co-ordination

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