Unit I (Introduction of Macroeconomics)

Macroeconomics vs. Microeconomics

• Macro: study of economy as a whole

           -international trade
          - supply and demand 
          - minimum wage

• Micro: study of individual or specific units of economy  

          -market structures
          -Business organizations 


Positive vs. Normative

• Positive: attempts to describe world as is 

          -"what is..."
          - collects and presents facts 

• Normative: attempts to prescribe how the world should be

          -"ought to be"
          -"should be" 
          - an opinion 

Needs vs. Wants

• Needs: Basic requirement for survival 

         - food
         -water
         -shelter
         -clothes

• Wants: Desire of citizens 

         -new car
        -new phone
       - extra money

Goods vs. Services:

• Goods: Tangible commodities

         -capital good: items used in the creation of other goods (machinery, trucks , and factories)
        -consumer good: goods that are introduced for final use by consumers

• Services: work preformed for someone 

        - Doctor's checkup