Macroeconomics Vs. Microeconomics
Macro- study of the economy as a entire whole
micro- study of behavior of individuals in economy
Normative Vs. Positive economics
normative economics- economic goals based on societies morals
positive economics- factual basis on how economy works
Utility
satisfaction for buying good
4 economic resources
Land, labor, capital, entrepreneurship
production possibilities curve
Economic model that shows impact of scarcity by showing the max number of goods that can be produced at different price points
What is implied on a Production possibilities curve?
Full employment, fixed resources, fixed technology, 2 goods
If a point is inside Production possibilities curve what is it?
Under utilization
If a point is outside the Production possibilities curve what is it?
An impossible production point
Opportunity cost
The value of the next best alternative (implicit cost) when you make a decision
explicit costs
All money spent
implicit cost
The value of the resources that could be used somewhere else
What would cause a production possibilities curve to shift outward?
Economic growth
Why is trade and specialization beneficial to a country?
They increase productivity and allow countries to obtain a greater total output
Difference between consumer and capital goods?
Consumer goods- products used by consumers
capital goods- products used by producers to make consumer or capital goods
