Economics

• Economics uses scientific methods to build theories that explain behaviors of Households, Firms, and Governments in making decisions related to the Allocation of Limited Resources to satisfy wants
• Ceteris Paribus is a Latin phrase meaning "all other things being equal." It is used to isolate and analyze the relationship between two variables by assuming that all other factors remain constant
• Positive Economics describes and explains economic phenomena, including the development and testing of theories and statements whose accuracy can be tested
• Normative economics expresses value judgments, including subjective statements that are impossible to verify and test
• Microeconomics is concerned with the individual parts of the economy, specific groups of people with different limited resources affecting different markets in terms of price and output
• Macroeconomics is the study of the economy as a whole