Economy

Allocation of scarce resource

Microeconomics Macroeconomics

Vision of the economy of the individual level

Normative economics positive economy

Flow variable analysis stock variable analysis

Long-term analysis

Analysis at exact moment

How should things be

How the things are

Vision of the economy at ajoint level

Individual decision marking

Interaction of individuals

Functioning of the economy as a whole

How does it work

Standard of living depends on productivity

the total of products produced

Prices risewhen there is money supply

The more money, the easier it is to purchase goods or services

Relationship between macroeconomic variables

Variable of unemployment and inflation

How they interact

Trade can improve welfare

Exchange of goods or services

Markets are mechanisms to regulste the economy

Meet the need of both parties

The govermment can improve the performance of the economy

Equity through different economic policies

How they think

People face tradeoffs

choice options

Opportunity cost

What is renounced

People think in marginal terms

Decisions that are more convenient concidering a unit

individuals respond to incenives

Negative and positive

Develops allocation process

Means

Shortage

different purposes

Consumption Investment Public spending Imports and exports

Trase-offs and opportunity

Earth Capital Job Business knowledge or skill

Efficiency Equity