Introduction to Macroeconomics and Microeconomics

Scarcity: Limited resources lead to the necessity for choices.
Opportunity Cost: The cost of the next best alternative foregone when a choice is made.
Budget Line: Illustrates the combinations of goods/services that can be purchased with a given budget.
Rational Decisions: Choices made to maximize utility.
Marginal Analysis: Economic decisions based on comparing marginal benefit (MB) and marginal cost (MC); if (MB ext{ ≥ } MC), the decision is rational.
Production Possibilities Frontier: Shows various combinations of goods that can be produced with available resources and technology.

Microeconomics: Focuses on individual households and businesses, resource allocation decisions, and pricing in specific markets.
Macroeconomics: Studies the economy as a whole, including indicators like GDP, inflation, and unemployment. Basics are about the trees (micro) vs. the forest (macro).

Entrepreneur: Assembles resources and assumes production risks.
Capital Resource: Includes tools/machinery used in production (e.g., software, computer chips).
Land Resource: Natural resources utilized in production (e.g., natural gas).

"There is no free lunch": Every choice has an opportunity cost.
Consequences of Scarcity: Individuals must make choices among alternatives.
Rational Self-Interest: People make decisions aimed at maximizing their satisfaction.

Marginal Cost: Change in total cost from producing one more unit; calculated using specific output levels.
Law of Diminishing Marginal Benefit: As consumption of a good increases, the additional satisfaction (benefit) from consuming one more unit decreases.

Choosing between college (tuition as cost) and a job (salary as an opportunity cost).
Evaluating choices such as movies vs. studying based on perceived benefits.