Unit 1 - Economics Introduction
Macroeconomics vs Microeconomics
Macro-The study of the economy as a whole (Big Picture)
-Ex:Supply+Demand, International Trade
Micro-Study of individual or specific units
-Ex:Market Structure, Business organization
Positive Economics vs Normative Economics
Positive-Attempts to describe the world as it is very descriptive
-Ex: collects and presents facts "What is"
Normative-Attempts to prescribe how the world should be very prescriptive
-Ex:"Ought to be" "Should be" - Opinion
Needs vs Wants
Needs-basic requirements for survival
-Ex: (H2O, Food, Shelter, Clothing)
Wants- Desires of Citizens
-Ex:what you wish for
Goods vs Services
Goods-Tangible commodities (Bought,Sold,or Produced)
-Ex: Capital goods-items used in the creation of other goods (Trucks,Factory Machines)
consumer goods-Goods that are intended for final use by the consumer
Services-Work that is performed for someone
-Ex:(Haircut,School, Concert)
Scarcity vs Shortage
Scarcity-the most fundamental economic problems facing all societies
-Ex:How to satisfy unlimited wants with limited resources, involves a choice (oil)
Shortage-Quantity Demanded> Quantity Supply
Factors of Production
Factors of Production-Resources required to produce goods and services
1.Land-Natural resources
2.Labor-Workforce
3.Capital -Human:(Skills)[where/how]-(College/training) Physical:(Tools,Machinery,Buildings,Trucks)
4.Entrepreneurship-Innovative and risktaker