Introduction to Economics

Flashcards covering key concepts from the introduction to economics.

What is the definition of economics?

Economics is the scientific study of how societies make choices under conditions of scarcity.

What does positive economics focus on?

Positive economics is concerned with what is, i.e., how the economy works.

What is normative economics concerned with?

Normative economics is concerned with what should be and offers recommendations based on personal value judgements.

What does microeconomics study?

Microeconomics is the study of individuals, households, and firms’ behaviour in decision making and allocation of resources.

What is the focus of macroeconomics?

Macroeconomics studies the behaviour and performance of an economy as a whole.

What is an economic model?

An economic model is a set of assumptions that approximately describes the behaviour of an economy or economic agent.