Unit 1

Four Main Topics

1.) Macroeconomics- (ex. Inflation, supply & demand, GDP, wages)

             VS.

     Microeconomics - study of how household and firms makes decisions and how they interact with  the                                        market.

2.) Positive Economics - claims that attempt to describe the world as is very descriptive. (ex. Min. wage                                              laws causes unemployment.)

               VS.

  Normative Economics - claims that attempt to predict how the world should be. (ex. The government                                                should raise minimum wage.)

3.) Needs - basic requirements for survival.

         VS.

     Wants - desires of people

                  Scarcity - limited fundamental economic problem that all societies face.

                  Shortage - situation quantity demanded is greater than quantity supplied.

4.) Goods - tangible commodity bought and traded that are produced

        VS.         1. Consumer

                       2. Capital

      Services - work performed for someone else

Factors of Production:

1.) Land - natural resources 

2.) Labor - work force

3.) Capital: 

             Human Capital - knowledge & skills a worker gains through education and experience

             Physical Capital - human made objects used to create other goods and services

4.) Entrepreneurship - product risk taker