Intro To Economics

• Ma

Macroeconomics: the study of the economy as a whole

• supply and demand
• international trade
• minimum wage

Microeconomics: the study of individual or specific units of the economy.
Where people make decisions and how their decisions interact.

• supply and demand
• market structure

Positive Economics: attempts to describe the world as is.

• descriptive
• collects and presents facts

Normative Economics:It attempts to prescribe how the world should be.

• Very prescriptive
• Thrives on what ‘ought’ to be done and what ‘should’ be done
• Opinion-based

Needs: Basic requirements for survival

• food
• clothing
• shelter
• water

Wants: Desires of citizens


Goods: A tangible commodity that can be bought, sold, or produced.

• capital goods: items used on the creation of other goods
• consumer goods: goods that are intended for final use of the customers

Services:Work that is performed for someone


Scarcity:The most fundamental economic problem facing all societies.
How to satisfy unlimited wants with limited resources. Always necessitates a choice.

Shortage:Quantity divided is greater than quantity supplied