Basic economic concepts

                                                 Macroeconomics vs Microeconomics 
Macroeconomics- the study of the economy as a whole.

Microeconomics- the study of individual parts of the economy.

                                                Positive vs Normality economics 
Positive - claims that attempt to describe the world as is ( ex. minimum wages law causes unemployment)

Normality - claims that attempt to prescribe how the world should be (ex . the government should raise the minimum wage)

                                                             Wants vs Needs
Wants - desires of citizens 

 Needs - basic requirement for survivor 
                                               
                                                      Scarcity vs Shortage 
Scarcity - the most fundamental economy problems that all society face. ( how to satisfy limited wants with limited resources )

 Shortage - are temporary ; when quantity demand is greater than quantity supplier.

                                                     Goods vs Services 

  1. Capital goods - items use in the creation of other goods (lettuce)
      2. Consumer goods - good that are intended for final use by the consumer (Burger )

       Services - work perform by on person by another.

                                                     Factors of production

  1. Land - natural resources 
  2. Labor - work exerted 
       3. Capital 
  • Human capital-  The knowledge in skills a worker gain through education and experience .
  • Physical capital - Human made objects use to create other goods and services.  
       4. Entrepreneurship - innovator and risk taker 

Comments

  1. Emmanuel O.September 5, 2019 at 9:42 PM

    I love the way you highlighted economics principles. I think it's interesting that human capital counts as a part of the factors of production. Knowledge and skills are need to run the economy.

    ReplyDelete

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