the study of the economy as a whole
- minimum wage
- international trade
- supply/ demand
Microeconomics
study of the individual or specific units of the economy
- market structure
Positive Economics
Claims that attempt to describe the world as is
- collects and presents facts
- "What is"
Normative Economics
Claims that attempt to describe how the world should be
- Opinion
- "Ought to be/ Should be"
Needs
Basic requirements for survival
- (food, water, shelter, clothing)
Wants
Desire of citizens
Goods
Tangible commodities
- (bought, sold, produced)
- Capital good: items used in the creation of other goods (factory machines/truck)
Services
Work that is performed for someone
Scarcity
The most fundamental economic problem that all societies face
- Trying to satisfy unlimited wants with limited resources
Shortage
Quantity demanded is greater than quantity supplied
*Here is a video that can explain the difference between scarcity and shortage if you are still confused.
Wow, your blog post really captured the essence of everything that we learned thus far in Unit 1. From supply and demand to the PPG, I was able to understand everything clearly.
ReplyDeleteI think the picture you have here to show the difference between positive and normative economics is really helpful because it is a real world example. While the video about Scarcity vs. Shortage was helpful with correct definitions, I think it could have been more attention-grabbing.
ReplyDeleteThis blog has everything I need to study for this test today, it was longer and more detailed than my notes. I also like the fact that you covered all of unit one and helped me understand this completely.
ReplyDelete