Eco 025: Basic Microeconomics

Economics

study of how individual or society make decisions—focuses on production, distribution, and consumption

Microeconomics

study of how individuals, households, firms, and government make choices

Macroeconomics

study of the economy as a whole

5 basic economic questions

What to produce, How to produce, For whom to produce, How much to produce, and Who gets to make a decision

Law of Scarcity

study of the production and distribution of good and services (Scarcity must exist)

Opportunity Cost

potential benefits been missed out when choing one alternative over another

Different Types of Governments

Democracy, Dictatorship, Monarchy, Oligarchy, Theocracy

Democracy

rule by people through elections

Dictatorship

a single leader in a small group

Monarchies

rule by king and queen

Oligarchies

rule by small elites

Theocracy

rules by religious authorities

Demand

customer’s desire and willingness to pay for specific goods and services

Demand schedule

table that shows the relationship between the product and the demand

demand curve

deman schedule in graphical form