Basic Concepts of Economics

1. Macroeconomics - The study of the economy as a whole.

   Microeconomics - The study of factors and effects and how decisions affect the economy.

2. Positive Economics - The attempt to describe the world as it is. It is very descriptive and collects/presents data.

   Normative Economics - These statements attempt to prescribe how the world should be and is very subjective (opinion based).

3. Needs - Basic requirements for survival

   Wants - Desire; materialistic wants

4. Scarcity - The most fundamental economic problem facing all societies

   Shortage - When quantity demanded exceeds quantity supplied/available

5. Goods - Tangible commodities that can be bought, sold, traded and produced.

• Capital Goods: Items used in the creation of other goods.
• Consumer Goods: Goods intended for final use by the consumer.
• Services - Work performed for someone.