Basic Concepts of Economics- January 3, 2017

Basic Components of Economic

I. Macroeconomics vs. Microeconomics

1. Macroeconomics: 
   -study of the economy as a whole
   -ex) international trade, inflation
2. Microeconomics:
   -study of individual or specific units of the economy
   -ex) Supply and Demand, market structures, business organization 

II. Positive Economics vs. Normative Economics

1. Positive Economics:
   -Claims that attempt to describe the world as it is.
   -Descriptive
   -Collects and presents facts
2. Normative Economics:
   -Claims that attempt to prescribe how the world should be
   -Opinion based

III. Needs vs. Wants 

1. Needs:
   -Basic Requirements for survival
2. Wants:
   -Desires

IV. Scarcity vs. Shortage

1. Scarcity:
   -Fundamental economic problem that all society faces
   -How to satisfy unlimited wants with limited resources 
2. Shortage:
   -Quantity demanded is greater than Quantity supplied. 

V. Goods vs. Services

1. Goods:
   -Tangible commodities
   -Something you can touch and feel.