Macro vs. Micro economics
Marco economics: The study of the economy as a whole
Micro Economics: study of individuals, households and firms' behavior in decision making and allocation of resources.
Needs vs. Wants
Needs: Basic requirements for survival
- Food, water, shelter, clothes
Wants: desires of the citizens
- Luxury clothes, brands
Scarcity vs. Shortages and surplus
Scarcity: the fundamental economic problem of having seemingly unlimited human wants and needs in a world of limited resources.
Shortages: Where quantity demanded exceeds quantity supplied
Quantity demanded > quantity supplies (raise price)
Surplus: Quantity demanded < quantity supplies (lowers price)
Positive Vs. Normative
Positive economics: Claims that attempts to describe the world as is
- Very descriptive
Normative economics: claims that attempt to describe how the world should be
- Ex: government should...
Goods vs. Services
Goods: tangible commodities, material that satisfy human wants and provide utility to consumer making a purchase
Services: work perform for someone
- Nail salon, hair salon
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