·
Macroeconomics-
Study of the entire economy
·
Microeconomics-
Study of part of the economy, how households and firms make decisions and how
they interact in markets (supply and demand)/ market structures
Fact vs. Opinion
Fact:
Positive economics- claims that attempt to describe the world as is, it is very
descriptive.
Example:
Minimum wage laws causes unemployment
Opinion:
Normative economics- claims that attempt to prescribe how the world should be.
Example:
The government should raise the minimum wage.
Scarcity vs. Shortage
Scarcity:
The most fundamental economic problem that all societies face, try to satisfy
unlimited wants with limited resources
Shortage:
A situation in which quantity demanded is greater than quantity supplied
Ex:
water; oil
Goods vs. Services
Goods:
Bought, Sold, Traded, Produced
Consumer
goods: goods that are intended for final use by the consumer
Capital
goods: items used in the production of other goods
Services:
any work performed Ex: Barber, plumber
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