Ch. 1: Economics: Foundations and Models

Chapter 1 of Macroeconomics. This is a summary of chapter 1 to study for the Midterm exam.

Economics

the study of the choices people make to attain their goals given their scarce resources

Microeconomics

the study of how households and firms make choices, interact in markets, and government influence

Macroeconomics

the study of the economy as a whole, including inflation, unemployment, and economic growth

Market

a group of buyers and sellers of a good or service and the institution or arrangement by which they come together to trade

Productive Efficiency

producing a good or service at the lowest possible cost

Allocative Efficiency

production aligns with consumer preferences

Equity

fair distribution of economic benefits

Efficiency

achieving the best possible outcomes

Normative Analysis

concerned with what ought to be

Positive Analysis

concerned with what is