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Examines how individuals, instutions, and society make choices under conditions of scarcity.
Or Economic way of thinking, has several critical and closely interrelated features.
To obtain more of one thing, society forgoes the opportunity of getting the next best thing.
Comparisons of marginal benefits and marginal costs, usually for decision making.
Microeconomics & Macroeconomics
Microeconomics - focuses on specific decision-making units of the economy.
Macroeconomics - examines the economy as a whole
Positive & Normative Economics
- Positive Economics- deals with factual statements. focus on facts and cause and effect relationship (what is)
- Normative Economics- involves value judgement. what the economy should be like(what ought to be)