economics c1 p1

define the economics definition.

social science that studies the choices that individual, business, government and entire societies make as they cope with scarcity (limited goods/services) .

compare the differences between microeconomic and macroeconomic studies as well as positive and normative analysis.

micro is the study of individual parts of the economy such as public, business, and personal choices.

macro is the study of economic system as a whole such as national income, trade cycle, unemployment rate, inflation and general price level.

Positive analysis deals with objective statements and facts.

normative analysis involves subjective judgments about “what ought to be”.

describe the basic concepts in the economy.

Scarcity: the fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

Choice: the act of selecting among alternatives when faced with scarcity (limited goods/services).

Opportunity cost: the value of the next best alternative that is forgone when making a decision.

discuss the production possibilities frontier.