Wednesday, January 13, 2016

UNIT 1 Notes - January 5th, 2016

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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