Economics

• A monopoly is when one business has complete control over an industry.
• An economy is a system for deciding how scarce resources are used so that good and services can be produced and consumed.
• Factors Of Production

  Natural Resources are unlimited resources that are gifts given by nature like for example water, oil, copper, natural gas

  Labour involves any human input, it is any work done by people contributing to production.

  Capital refers to machines and factories
• The real economy refers to the blue arrows. The company gets factors of production and the households gets good and services in return. 


  The red arrows show the financial economy. This shows where the money goes. The households expences become the companies income

  A) labour, capital, natural

  B) labour, capital, natural

  
• The lower the price, the more willing and able we are to buy the product.

  The higher the price, the less willing and able we are to buy the product.

  
• Factors that affect Demand

  1. Price of the product: If the price of a good decreases, consumers tend to buy more of the product.
  2. Income level: Any change in consumers income can influence their purchasing power.
  3. Taste/Fashion: if a product becomes popular because of a trend or if people start liking it more because of advertisements, the demand for that product can go up.
• The higher the price, the more willing and able we are to supply the product

  The lower the price, the less willing and able we are to supply the product.

  
• Factors that affect supply

  1. Cost of Production: The expenses involved in making a product, if production costs increase, supply may decrease
  2. Technology: New machinery or techniques might allow factories to produce more goods in less time.
  3. Natural events: Natural events like weather disasters or crop failures can disrupt production and limit supply.
• Equilibrium Price (stable price)


  The equilibrium price is the price where the quantity demanded is equal to the quantity supplied.

  
• A shift in supply card 


  This occurs when quantities of a product or service supplied change at every given price.

  
• A shift in demand curve 



  It means that at least one of these factors has changed, causing consumers to demand more or less of a product at every price level.

  
• Adam Smith's 7 features of the market:
• Freedom of industry:

  • Allows any individuals to start their own business
  • Encourages competition
• Many actors:

  • Numerous buyers and sellers participating in economic transactions
• Free competition:

  • Mutually independent businesses engage in the same activity to attract consumers
• Private ownership:

  • Individuals and businesses have the right to own, control and transfer assets such as land, capital, and property
• Firm Rules:

  • Rules enforced by the government ensure fairness, transparency, and stability
• Comprehensive Information:

  • Consumers have access to information about various goods and services, including their quality, features, and prices
• Limited State Interference:

  • Government doesn't get too involved in controlling how businesses operate in the market
• GDP


  Value of all completed goods and services produced in a country in one year