Introduction to Macroeconomics vs Microeconomics

Macro=big Micro=small

Macroeconomics: study of the economy as a whole

• international trade
• supply and demand
• minimum wage

Microeconomics: study of individual or specific units of the economy

• market structures
• business organizations

Positive Economics VS Normative Economics

 Positive Economics: attempt to describe the world as is (very descriptive)
"what is"
-collects and presents facts
 Normative Economics: attempts to describe how the world should be
"ought to be"
"should be"
(opinions)

Needs VS Wants

Need: basic requirement for survival

• food
• shelter
• H2O
• clothing

Wants: desires of citizens

• desires

Goods VS Services

Goods: tangible commodities citizens used in the creation of other goods

• trucks
• planes

     *capital goods: things that help move a finished product

     *consumer goods: goods that are intended for finish use by a consumer 

Services: work that is performed for someone 

• beauty shop

Scarcity VS Shortage

Scarcity: the most fundamental economic problem that a society faced (how to satisfy unlimited wants with limited resources)

• oil

Shortage: Where quantity demand is greater then quantity supply