Economics is the study of how individuals or societies coordinate their wants and desires. Five important things to learn in economics are: •Economic reasoning- decisions based on costs vs benefits •economic terminology •economic insights •information about economic institutions •information about policy options. MC vs MB •Comparing MC and MB will tell you how you should adjust your activity to be as well off as possible •if MB > MC then do it •if MB < MC do not do it. An economic institution:•A physical or mental structure that Significantly influences economic decisions •ex. Corporations, governments,and cultural norms. Economic policy: •An action (or inaction) taken by gov’t to influence economic events such as recessions or deficits. Economic forces: •Invisible hand- price changes guide our actions in the market. •The Invisible handshake- social and historical forces •the invisible foot- political and legal forces. Macro vs Micro •Microeconomics- the study of individual
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Costs vs Benefits, MC vs MB, economic institutions ·information, ·Economic reasoning- decisions, ·economic insights ·information