Tuesday, January 3, 2017

January 3, 2017

Basic Concepts of Economics 

Macroeconomics vs. Microeconomics

Macroeconomics: The study of the the economy as a whole. 

  • Inflation
  • Minimum Wage
  • International Trade

Microeconomics: The study of individual or specific units of the economy.

  • How households and firms make decisions and how they interact in markets 
  • Looking at specific thing (Ex: Supply and Demand)

Positive Economics vs. Normative Economics 

Positive Economics: An attempt to describe the world as is. 

  • Very descriptive 
  • Collects and presents facts
Ex: "Minimum wage causes unemployment."


Normative Economics: Attempts to prescribe how the world should be

  • Opinion Based 
Ex: "The government should increase minimum wage."

Needs vs. Wants 

Needs: Basic requirements for survival 

Ex: Food, Clothing Shelter 


Wants: Desires

Scarcity vs. Shortage 

Scarcity: The most fundamental economic problem facing all society 

*Unlimited wants with limited resources 

Shortage: Quantity demanded exceeds quantity supply

*Shortage is temporary, scarcity is permanent 

Goods vs. Services 

Goods: Tangible Commodities

  • Can be bought, sold, traded, and produced   

Capital Goods: Items that are used in the creation of other goods
Ex: Steel for a car

Consumer Goods: Intended for final use by the consumer 

Ex: The actual car


Services: Work that is performed for someone. 


4 comments:

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  2. I also enjoyed the set up of this blog post. However, I would suggest to use more images that pertain to the topic at hand to enhance the already useful post. I definitely believe that this blog is an asset that could help one understand macroeconomics far better.

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  3. Overall this is a great blog! Its easy to understand and well presented. Its eye catching and the colors compliment the blog without being too much. The only thing that I would recommend to you is that it would be easier to navigate the blog if the individuals topics were separate posts instead of one big post. Besides that great job!

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  4. Your blog is very neat and easy to read. This makes the multiple topics easy to understand, good use of pictures (although there were two pictures that said they could not be shown)but other than that, great blog!

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