Macroeconomics

The study of how people use their scarce resources to satisfy their unlimited wants

The inputs used to produce the goods and services that people want

• -Labor
• -Capital
• -Natural Resources
• -Entrepreneurial Ability

The physical & mental effort used to produce goods & services. (Time)

The buildings, equipment, & human skills used to produce goods & services. (Physical vs. Human)

All "gifts of nature" used to produce goods & service. (Renewable vs. Exhaustible)

Managerial & organizational skills needed to start a firm, combined with the willingness to take the risk of loss or profit.

the means by which buyers and sellers carry out exchange

Where goods and services are bought and sold

where resources are bought and sold

• -Maximize benefit
• -Minimize cost

Economists analyze marginal choices, those that are incremental, additional, or extra.

Studies behavior in particular markets

Studies behavior of entire economies

Simplification of reality used to predict real world cause/effect

Assumption that other variables remain unchanged

What is

What should be

The incorrect belieft that correlations equals causation

The incorrect belieft that what is true for the individual is true for the group

Not taking into account the unintended consequences of economic actions/policy