Basic Concepts of Economics

• Macroeconomics vs. Microeconomics

• Macroeconomics - Study of economy as a whole
• Examples: International trade, inflation and minimum wage flaws.

•  Microeconomics - Study of individual or specific units of economy
• Examples: Households affect economy and Income taxes.

• Positive economics vs. Normative economics 
• Positive - Claims that attempt to describe the world as is. Very descriptive to nature and it collects/presents facts.
• Negative - Claims that attempt to prescribe how the world should be. Opinion based, what outta be should be.

• Needs vs. Wants
• Needs - Basic requirements for survival.
• Examples: Food, water and basic things

• Wants - Desires. Things you don't need for survival, can live without.

• Scarcity vs. Shortage
• Scarcity - Fundamental economic problem facing all societies. How to satisfy unlimited wants with limited resources.
• Shortage - Quantity demanded is greater than quantity supply.
• Quantity demand is when they don't have any of the items left.

• Goods vs. Services
• Goods - Tangible commodities. Something you can physically touch is tangible.
• Capital goods: items used in the creation of other goods
• Consumer goods: goods that are intended for final use by the consumer.

• Services - Work performed for someone.
• Examples: Barber shop, concert and education

• Factors of Production

1. Land - Natural resources
2. Labor - Work exerted
3. Capital - Human Capital and Physical Capital
4. Entrepreneurship - Human Capital: People acquire skills and knowledge through experience and education. Physical Capital: Machinery, tools, money and equipment. Entrepreneurship: They are risk takers and are innovative.

•   Trade-offs - It is an alternative that we sacrifice when we make a decision.
• Opportunity cost - The most desirable alternative given up as a result of a decision.
• Guns or Butter - I is a phrase but refers to the trade offs that nations face when choosing whether to produce more or less military or consumer goods.
• Things at the Margins - This is whether we are deciding whether to add or subtract an additional unit of some source.

If you need more info:
http://campus.greenmtn.edu/faculty/gregbrown/sc310/sc310nt1.html