Unit 1 Intro to Economics 1/4/16

Macroeconomics                                  

:is the study of the economy as a whole   

-international trade                                                           

-market structure 

-supply and demand       

  vs

Microeconomics  

:is the study of individual or  specific units of the economy 

- business organizations 

-minimum wage 

Positive economics

-Attempts to explain the world as is    

 -"what is"

-collects and presents facts 

 vs           

Normative economics 

  -attempts to prescribe how the world should be

Needs

:Basic requirement for survival

• Food
• Water
• Shelter
• Clothing

Wants    

:Desires of citizens 

• money 
• clothes 
• cars  

Goods

-Tangible commodities (Bought,Sold,or Produced)

: Capital goods-items used in the creation of other goods (cars,Factory Machines)

: consumer goods-Goods that are intended for final use by the consumer

vs

Services 

-Work that is performed for someone

-(Haircut,School, Concert)

Scarcity 

Scarcity-the most fundamental economic problems facing all societies

-Ex:How to satisfy unlimited wants with limited resources, involves a choice (oil)

vs 

Shortage 

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 risk-taker

  
MAY THE FORCE BE WITH YOU