Macroeconomics Vs Microeconomics
Ø Macroeconomics-
The study of the economy as a whole
o
International Trade
o
Supply & Demand
o
Minimum Wage
Ø Microeconomics- The study of individual or specific units
of the economy
o
Market Structures (Monopolies/Oligopolies)
o
Business Organizations
(Corporations/Partnerships)
Positive Economics Vs Normative Economics
Ø Positive
Economics- Attempts to
describe the world as is; Very descriptive. (What is)
o
Collects and presents FACTS
Ø Normative
Economics- It attempts to
prescribe how the world should be (“Ought to be,” “Should be” OPINIONS)
Needs Vs Wants
Ø Needs- Basics requirements for survival
o
Food, Water, Shelter, Clothing
Ø Wants- Desires of citizens
Goods Vs Services
Ø Goods- Tangible commodities
o
Capital Good:
Items used in the creation of other goods (Machinery/Factories)
o
Consumer Good:
Items intended for final use by the consumer
Ø Services- Work performed for someone
Scarcity Vs Shortage
Ø Scarcity- The most fundamental economic problem that
a society faces; How to satisfy unlimited wants with limited resources
Ø Shortage- Quantity demanded is greater than quantity supplied.
(QD>QS)
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