Basic economics

Economics is broken down into two categories: micro and macro. Micro is focused on choices made by individuals, households, and firms, whereas macro is focuses on larger concepts, including GDP, unemployment rates, and inflation. Economics itself has to do with the choices people make. Below, I’ve given a breakdown of where micro and macro overlap.

General terms

Resources—Anything that can be used to produce something else.

  • Land (minerals, timber, etc.)
  • Labor (people)
  • Capital (factory, machinery, etc.)
  • Entrepreneurship (management, innovation, etc.)

Opportunity cost—the value of what you give up to get something else.

Positive—how things are vs. normative—how things should be.

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