Unit One: Chapters 1 and 2- Vocabulary

THE BASICS

Notes from (1/5/16)

Macroeconomics- Study of the economy as a whole "The Big Picture"

-   Supply and Demand
-   International Trade
-   Minimum Wage

Microeconomics- Study of individual or specific units of the economy

-   Market Structures
-   Business Organizations

Positive Economics- It attempts to describe the world as is

-   Very DESCRIPTIVE
-   Collects and presents facts
-   Proven by facts

Normative Economics- It attempts to describe how the world should be

-   Very PRESCRIPTIVE

-   "Ought to be"
-   Opinion-based
Needs- Basic requirements for survival

-   Food, Water, Shelter, and Clothes

Wants- Desires of citizens

Goods- Tangible commodities

-   Can be Bought, Sold, or Produced

• Capital Goods- Items can be used in creation of other goods
• EX- Trucks, Factory Machines 
• Consumer Goods- Intended for final use by consumer
• EX- Big Mac at McDonalds

Services- Work that is performed for someone

Scarcity- Most fundamental economic problem facing all societies

-   How to satisfy unlimited wants with limited resources

-   Always necessitates choice

Shortage- Quantity Demanded > Quantity Supplied


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