Economics is the study of how individuals, business firms,

governments, and societies as a whole make choices under

conditions of scarcity.
Scarcity is a situation in which people cannot have everything that they want
because of limited resources
Resources are the most basic elements that people use to produce the goods and
services that they want
trade-offs- situations in which they have to choose between two things (or
activities) that cannot be had (or done) at the same time.
Land refers to resources provided by nature such as fertile soil, forests, water,
and mineral deposits
Labor is the physical and mental effort human beings use to produce goods and
services. The ultimate source of labor is a more fundamental resource-time.
Capital is anything that we produce-factory buildings, skill, and knowledge of
workers-and then use in the production or other goods and services
Entrepreneurship refers to the ability that some people have for organizing the
other resources-land, labor, and capital-to produce goods and services.
resources are part of the more general term inputs, which refers to all the things
that are used to produce goods and services. Inputs include land, labor, capital,
and entrepreneurship as well as other things made from them (electricity,
cement, plastic) which are, in turn, used to make goods and services
Microeconomics takes a close-up view of the economy and analyzes individual
parts of an economy-a consumer, a business firm, an industry, a single market-
rather than the whole economy
Macroeconomics, by contrast, stands back from individual parts of an economy
and takes an overall view of the economy
Positive economics attempts to determine how the world is
Normative economics goes beyond how the world is and considers how the
world ought to be.

The opportunity cost of any choice we make is the value we place

on the best opportunity that will have to be given up if that cation is
taken.
individual choice is a choice that is based on internal stimuli and
without any influence from the external environment.
Social choices are those choices based on external stimuli. When
making these choices, we consider our choice on the opinion of society,
and our decision becomes what the social groups agree
In many tribal societies and small villages where tradition remains a
dominant force, decisions on who gets what of available resources,
goods, and services are governed by traditional principles of fairness
where command is the dominant method of resource allocation,
decisions on who gets what of available resources, goods, and services
are governed by a central planning system
In countries where market is the dominant method of resource
allocation, decisions on who gets what of available resources, goods,
and services are determined by the independent decisions of individual
consumers and producers through a system known as the price system