Acemoglu Chapter 1 - word and explanation

Economic agent

an invidual or group that makes choices

scare recourses

things that people want, but the quantity that people want exceeds the quantity that is available

scarcity

the situation of having unlimited wants in a world of limited recources

economics

the study of how agents choose to allocate scarce recources and how those choices affect society

positive economics

analysis that generates objective descriptions or predictions about the world that can be verified with data

normative economics

analysis that prescribes what an individual or society ought to do

microeconomics

the study of how individuals, households, firms and goverments make choices and how those choices affect prices, the allocation of recources, and the well-being of other agents

macroeconomics

the study of the economy as a whole, the study of economics wide phenomena, like the growth rate of a country's total economic output, the inflation rate, or the unemployment rate

optimization

trying to choose the best feasible option, given the available information

equilibrium

the special situation in which everyone is simultaneously optimizing, so nobady