Econ Notes for Alyssa:3333

Economic enigmas= puzzles that can be explained through economic analysis.

Economic= the study of the how people/group use their resources to satisfy their wants.

• resource =is anything that can be use to make good/ services

  ==> they are limited due to a finite amount.

• Limited resources but people have unlimited wants.

• decision making is needed because people cant have everything they wanted, —> they must make a choice.

ECONOMIC

• Analyzing enigmas

• teach better decision making

• how people have unlimited wants with limited resources

• making policy/ recommendation

• analyzing how economy works
  

Positive economics = describe how things are ( gather data and information)

Normative economics = how things ought to be done. (gather the facts and analyze choices and solutions.)

7 PRINCIPLES of ECONOMIC WAYS OF THINKING

• scarcity forces tradeoffs: Due to the limited resources, you must choose one thing over one another, therefore, it is a tradeoff. ( ex: no free lunch principle)

• cost versus benefits: The cost are what you spent ( time and money) and the benefits are what you gain from making a tradeoff ( the service and goods).

• Thinking at the margin: thinking a little more or less of something. ( margin = the border)

• incentives matter: motivations for people to do what they do.

• trades make people better off: focus on what we do well and trade with others to have the better choices.

• market coordinate trade: where buyers and sellers can trade with each other until they satisfy.

• future consequences count: tell us to make decision with consideration for future consequences.