Wrap your head around Ideologies: Liberalism.

http://www.youtube.com/watch?v=e7qk8ZfuDJI&noredirect=1

A very important aspect of political science is understanding political ideologies. This video is brief and comprehensive and highlights the main points so take a quick look and memorize!

Circular Flow of Income in a Closed Economy without Govt. Sector

Closed Economy Without Govt. Sector

The two main bodies that occupy income are households and firms. In a closed economy without government sector these are the only two main components. 

As shown in the figure below the income (C) goes from households when they purchase goods or services to firms who manufacture the goods and services.

If the households dont spent all their income it becomes saved income (S) and in turn later becomes investment (I) when it is later spent to establish new firms.

Circular flow of Open Economy

In open economies, there is the involvement of the global world aswell. trade occurs between different countries in the form of their inports and exports.
when goods are supplied to another country its called an export and when goods are bought from other countries they arew called imports.
Now when such trading occurs money is spent or earned by the country and the change in GDP would be as follows:
    
  Y= C + I + G + X - M

Y= GDP
C= Comsumer Expenditure
I= Investment
G= Govt. expenditure
X - M= difference between exports and imports

How to score well in your Political Science courses.

One of the major reasons Political Science scares of many students is because ofthe large amounts of readings that are necessary for any Politics course. However, this large amount of workload can be very easily dealt with if we follow a few simple steps.

1. Get coffee before the class. To understand Politics you need to have a very clear and focused mind. The long lectures may let any mind stray off.
2. To stop yourself from falling asleep or losing track of what the instructor is saying, make notes. Write down in little columns or jot down every word out of the instructors mouth. The point is you keep writing. these notes will also be a big help later on.
3. Know your concepts. These will be the stepping stones for later knowledge. Keep key points of all your philosophers on your finger tips. These will keep on repeating themselves in different forms.
4. Discuss and Debate, there's no way better to understand politics better.

Types of Market Structures

There are four types of market structures

• Perfect Competition
• Monopolistic Competition
• Oligopoly
• Monopoly

Properties of Different Market Structures

     

Type of Market	Number of Firms	Freedom of Entry	Nature of Product	Shape of Demand Curve	Examples
Perfect Competition	Very many	Unrestricted	Homogeneous	Horizontal	Cabbages, Carrots
Monopolistic Competition	Many	Unrestricted	Differentiated	Downward slopping (relatively elastic)	Restaurants
Oligopoly	Few	Restricted	Differentiated or Undifferentiated	Downward Slopping (relatively inelastic)	Car Manufacturers
Monopoly	One	Completely Blocked	Unique	Downward Slopping (more inelastic than oligopoly)	Patent drugs

To understand these market structures one must know the relationship of a firm with its particular industry. this is best explained by table above. for further clarification we will analyze the demand and supply curves of firms in comparison to the industry that firm exists in.


The figure below shows the demand and supply of a firm in a perfect competition in comparison to the demand and supply of its industry

Firm vs. Industry in Perfect Competition

• The price of goods in a perfect competition is fixed because there are very many firms in the industry and one firm has no effect on the pricing decision.
•  If a firm in perfect competition increases its price, the customers would buy from some other firm since the product is the same.
•  Similarly there is no point of decreasing the price because one firm cannot cater to the whole industry's demand.