Eco Notes 1/7/15
Macroeconomics vs
Microeconomics
Macroeconomics- study of
major components of the economy ex. GDP, inflation, international trade
Microeconomics-
study of how households and firms make decisions and how they interact in
markets ex. Supply and Demand, Market structures
Positive economics vs
normative economics
Positive economics- claims
that attempt to describe world as is ex. Minimum wage laws cause unemployment.
Normative
economics- claims that attempt to prescribe how the world should be opinion
based ex. The government should raise the minimum wage.
Needs vs wants
Needs-
basic requirements for survival ex. Food, water, shelter
Wants-
desires of citizens broader than needs
Scarcity vs Shortage
Scarcity-
satisfying unlimited wants with limited resources; more permanent; most
fundamental economic problem facing all societies
Shortage-
quantity demanded greater than quantity supplied; temporary
Goods
2 types
of goods: Consumer and Capital
Consumer:
goods intended for final use by the consumer
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