1: Intro to Economics

Question 1

Economics Definition

Answer 1

Economics is the social science that studies the choices that individuals, businesses and governments make as they cope with scarcity (money & time) and the incentives that influence those choices

Question 2

Microeconomics

Answer 2

Microeconomics focuses on individual agents in the economy
 How households and firms make decisions and how they interact
 Aims to understand how scarce resources are allocated among alternative uses, the role of prices and markets and how economic policy can lead to better outcomes for society

Question 3

Macroeconomics

Answer 3

Macroeconomics looks at the economy as a whole

 Focuses on economy-wide phenomena, including inflation, unemployment and economic growth

Question 4

What are the 4 lessons?

Answer 4

1. People face trade-offs
2. The cost of something is what you give up to get it
3. Rational people think at a margin
4. People respond to incentives

Question 5

Ceteris Paribus

Answer 5

All things equal