1.1 - Scarcity

Economics

The study of scarcity and choice

Microeconomics

The study of how smaller economic units make decisions and how they interact

Macroeconomics

The study of the entire economy as a whole

Scarcity

The result of limited resources and unlimited wants

Scarcity Examples

Goods and services

Non-scarcity Examples

Air, trash, knowledge

Resources

Anything that can be used to produce something else

Land

resources from nature

Labor

efforts of workers

Physical capital

goods used to produce other goods and services

Entrepreneurship

the act of starting a business or taking risks for innovation

Consumer goods

a final good

Capital goods

a physical capital, goods used to make other goods

Trade-offs

A decision making situation where choosing one alternative requires giving up another

Shortage

A temporary market condition where quantity supplied is less than quantity demanded at current prices.

Positive economic statements

based on facts

Normative economic statements

based on value judgements, the way someone believes things ought to be

Opportunity cost

The value of the next-best alternative you give up when you make a choice.