Scarcity, Choice, and Opportunity Costs

Economics exists because of scarcity. If resources were unlimited, there would be no need to worry about their allocation.
Economics is primarily concerned with the scarcity of resources.
Faced with scarcity, we must choose how to allocate our resources.
Microeconomics focuses on how individuals, households, and firms make these decisions.

Economic resources are inputs to the production of goods and services.
There are four economic resources: land, labor, capital, and technology (or entrepreneurship).

Physical goods that are produced and used to produce other goods.
Examples: machinery, technology, tools such as computers, hammers, factories, robots, trucks, and trains used to transport goods, and other equipment employed in the production of a good or service.
In economics, "capital" refers to physical capital (equipment, machinery, tools) used to produce goods and services, not financial capital.
Physical capital is tangible, while financial capital isn't always.

The ability to combine the other productive resources into goods and services.
Refers to the ability to make things happen.
Example: the ability to make computers is considered technology, while the computer itself is a good.

Opportunity costs are usually expressed in terms of how much of another good, service, or activity must be given up in order to pursue or produce another activity or good.
Not all costs are monetary costs.

A model is a simplification of a concept or process used to better understand it by cutting away as much as possible to focus on key aspects.
Example: A map is a model of how roads are laid out and where they intersect.
Economists rely on models because it's impossible to capture the full complexity of human interaction.

Positive Statements: Statements of fact or descriptions of how something actually is.
Normative Statements: Statements that describe opinions or how things ought to be.
Economic analysis tends to focus mostly on positive analysis (description of phenomena, facts, and concepts).
Normative thinking is important for well-formed policy, so it's not completely absent in economics and policy-making.

The fact that there is a limited amount of resources to satisfy unlimited wants.

Things that are inputs to production of goods and services. There are four economic resources: land, labor, capital, and technology. Technology is sometimes referred to as entrepreneurship.

A Latin phrase essentially meaning "all else equal".
Used in economics to emphasize that the only changes you should be thinking about are the ones that are explicitly described.
Example: If we are talking about how someone reacts to a change in the price of a good, you should assume the only thing changing is price and not preferences, income, or anything else.

The logical principle that states you should make no more assumptions than the minimum amount needed to perform analysis.
In economics, we use Occam's razor when we invoke the ceteris paribus assumption.