Topic 1: Introduction to Economics

economics

how humans make decisions in the face of scarcity (scarcity = human wants for goods, services, and resources exceed what is available)

division of labor

the way in which different workers divide different required tasks to produce a good or service

economies of scale

for many goods, as the level of production increases, the average cost of producing each unit declines.

microeconomics

focus: individual decision-making; partial analysis of a single market or economic environment, focused on equilibrium outcomes.

macroeconomics

focus: structure and performance of economies; general analysis of the economy and linkages across markets and sectors