Macroeconomics vs. Microeconomics
Macroeconomics- Study of the economy as a whole
Microeconomics- Study of individual or specific units of the economy
Positive vs. Normative Economics
Positive Economics- Claims that attempt to describe the world as is (fact)
Ex: Minimum wage laws cause unemployment.
Normative Economics- Claims that attempt to describe how the world should be (opinion)
Ex: The government should raise the minimum wage.
Wants vs. Needs
Wants- Desires of citizens and are optional
Needs- Necessities and required for survival
Scarcity vs. Shortage
Scarcity- Most fundamental economic problem that all societies face. How to satisfy unlimited wants with limited resources (Long term)
Shortage- Quantity demand exceeds quantity supplied (Temporary)
Goods vs. Services
Goods- Tangible item
-Consumer goods- Goods that are intended for final use by consumer
-Capital goods- Items used in the creation of other goods
Services- Action performed by one person for another
Factors of Production
1. Land
-Natural Resources
2. Labor
-Workforce
3. Capital
-Human Capital- Knowledge and skills a worker gains through education and experience
-Physical Capital- Human made objects used to create other goods and services
4. Entrepreneurship
-Inventive and a risk taker.
Opportunity Costs and Trade Offs
Opportunity Costs- The most desirable alternative given when making a decision.
Trade Off- Alternative decision people make when having an economic dilemna
Microeconomics- Study of individual or specific units of the economy
Positive vs. Normative Economics
Positive Economics- Claims that attempt to describe the world as is (fact)
Ex: Minimum wage laws cause unemployment.
Normative Economics- Claims that attempt to describe how the world should be (opinion)
Ex: The government should raise the minimum wage.
Wants vs. Needs
Wants- Desires of citizens and are optional
Needs- Necessities and required for survival
Scarcity vs. Shortage
Scarcity- Most fundamental economic problem that all societies face. How to satisfy unlimited wants with limited resources (Long term)
Shortage- Quantity demand exceeds quantity supplied (Temporary)
Goods vs. Services
Goods- Tangible item
-Consumer goods- Goods that are intended for final use by consumer
-Capital goods- Items used in the creation of other goods
Services- Action performed by one person for another
Factors of Production
1. Land
-Natural Resources
2. Labor
-Workforce
3. Capital
-Human Capital- Knowledge and skills a worker gains through education and experience
-Physical Capital- Human made objects used to create other goods and services
4. Entrepreneurship
-Inventive and a risk taker.
Opportunity Costs and Trade Offs
Opportunity Costs- The most desirable alternative given when making a decision.
Trade Off- Alternative decision people make when having an economic dilemna
