Study Guide - Lesson 1 (Intro to Econ)

Study Guide - Lesson 1 (Intro to Econ) - Study Guide Lesson...

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Study Guide - Lesson 1 (Intro to Economics) What is the definition of economics? Social science that studies how people, firms and society make optimal choices under conditions of scarcity. What is the difference between microeconomics and macroeconomics? What do we study in each field? Mico - Individual people or firms and industries. ex. grains of sand Macro - The entire society or aggregate. ex. the entire beach What is the significance of the following terms and concepts? - Scarcity The is the condition that causes the study of economics. People have unlimited wants with limited resources. - Opportunity cost - Losing something to gain something. ex sleeping in vs. running, getting to work on time ect. - Rational self-interest Adam Smith spoke about this in his book "The Weath of Nations" People work or sell things to make money or get paid, This is in their own self-interest. - Cost-benefit analysis weighing options against each other. ex. Eating of cookies - should I eat them or should I not.
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