Introduction to Microeconomics

Scarcity

The limited nature of society's resources.

Economics

The study of how society manages scarce resources.

Microeconomics

Focuses on individual and firm decision-making regarding the allocation of limited resources.

Macroeconomics

Studies the behavior of an economy as a whole, focusing on factors like inflation, unemployment, and economic growth.

Positive economics

Focuses on facts and cause-and-effect relationships in economic analysis.

Normative economics

Involves making value judgments and recommending policy actions based on subjective analysis.

10 Principles of Economics

Fundamental concepts including trade-offs, opportunity cost, rational decision-making, incentives, and market organization.

Trade-offs

People face choices and must give up something to get other things.

Rational decision-making

Individuals think at the margin to make choices that maximize their benefits.

Government intervention

Can improve market outcomes, but there is a trade-off between inflation and unemployment in the short run.