The Discipline of economics

Production is the process of using material and labor inputs to create goods and services.

Distribution is the division of society’s out-put among its members.

Consumption is the eating up or using up of something of value, or the enjoyment of services from durable goods.

Scarce goods require valuable resources for their production

Free goods require no productive resources and are available in unlimited supply to anyone who wants them

Outputs are the goods and services an economy produces.

Inputs are the productive resources an economy uses to produce its outputs.

Capital is a productive resource consisting of land and other natural resources, such as mineral deposits, and reproducible capital, such as machinery and factory buildings

Labor is the productive resource consisting of the physical or mental work that people do in producing goods and services

Entrepreneurship refers to the innovating, organizing, and risk-taking activities of individuals and firms that create new products and new markets.

When conducting positive analysis, economist describe the economy and scientifically study what causes what

When conducting normative analysis, economists study whether an outcome or policy is desirable or undesirable and how, what, or whether to change to achieve the “best” possible outcome.

An assumption in economics is a fact or the oretical condition that is taken as given in an economics argument or discussion.

The economics person is the economist’s theoretical abstraction of a person behaving solely according to profit- or benefit maximizing goals.

A good is any item or service of value

A price is the amount paid for one unit of a good

A market  is the entire enterprise of buying and selling a good at a particular location or at geographically dispersed locations.

Microeconomics is the study of individual households, firms, and markets.

Macroeconomics is the study of the economy as a whole

In partial analysis, economists assume that all economic conditions remain fixed except those being studied in a particular market.