Unit 1.1

Economic: the study of scarcity and choice

Factors of production: anything used to produce goods and services

•Land : natural resources

•Capitol : resources used in production

•Labor : Human effort

•Entrepreneurships : the ability to combine resources, organize production, and take risks

Marginal analysis : to decide whether an additional action is worthwhile

Marginal benefit > marginal cost ; continue

Marginal benefit = marginal cost ; optimal decision

Microeconomics: decisions made by individuals, households, and firms

Macroeconomic: focus on inflation, unemployment, economic growth, and business cycles

Positive economic: an economic analysis that have definite right and wrong answers

Normative economic : economic analysis that involves saying how the economic should work

Household : individuals or groups that share income together and make economic choices

Firm : an organization that produces goods or services for sale