Scarcity and choice
Everyone has unlimited wants however we also have limited resources (not enough time, money ...etc.). With unlimited wants and limited resources choices must be made.
Economics: is the study of how people choose to use their scarce reosurces in an attempt to satisfy their unlimited wants.
Scarcity exists when there is not enough of something to satisfy everyone's wants at a zero price. One way is to start charging prices (those who are not serious to acquire the good/service will drop out).
However a drawback is that the wealthy get all the goods and services whilst the poor go without.
The choices made are dependent on the rational self interest (they depend on the decision maker).
Resources or Productive resources is anything that is able to produce a good or service (Land, Labour, Capital and Entrepreneurial ablitiy).
Land: Any natural resources
Labour: human services or human capital (you can add to your human capital by training or experience).
Capital: NOT MONEY. Anything manufacutred to help thr making of goods and services (machinery, equiptment or the factory itself).
Entrepreneurial Ability: Anyone who recognises a profit opportunity, able to organise resources and is willing to take a risk. (Joe Johnston - coffee plantation)
Micro Vs Macro
Microeconomics - Deals with choices of a single entity (one product, one house, one business, one industy etc.).
Macroeconomics - Deals with actions of thr economy as a whole (GDP, Business sector, Inflation, Unemployment).
Positive and Normative analysis
This type of analysis is factual analysis of "what is". They can be tested; they can be proven or disproven. There is no personal judjement involved.
This type of analysis is opinion based analysis of "what should be". They can be recognised because it involves personal judgementand ideals. They cannot be proven or disproven.