ECONOMICS Chapter 1 termins

Microeconomics

studies individual consumers, firms, and specific markets, focusing on small parts of the economy.

Macroeconomics

studies the economy as a whole, including inflation, unemployment, GDP, and economic growth.

Mesoeconomics

studies industries or sectors of the economy, lying between micro and macro.

Scarcity

resources are limited while human wants are unlimited, requiring people to make choices.

Opportunity Cost

is the next best alternative that is given up when making a choice.

Marginalism

is a decision-making approach that compares additional benefits with additional costs.

Law of Diminishing Marginal Utility

The law states that as more units of a good are consumed, the additional satisfaction from each extra unit decreases.