i. How households and firms make choicesii. How they interact in marketsiii. How the government attempts to influence their choicesb. Economics studied by using modelsSocial science because we deal with how humans reactc. Macroeconomics is the study of the economy as a whole, including topics such as inflation, unemployment, and economic growthII. Economic TermsTechnology: the processes a firm uses for turning inputs into outputs of goods and servicesAllows us for more economic growth and moneyHolds all the factors of production togetherCapital: manufactured goods that are used to produce other goods and servicesFactors of production (ingredients into the economy):Land: refers to natural resources that economy has available (i.e. farmland, climate, minerals, etc.)Labor: workersCapital: see aboveEntrepreneurship: business ownersVery importantIII. Common Misconceptions to avoidBelieving that economics is only about moneyConfusing positive and normative analysisPositive analysis is without valued judgment; only factsNormative analysis is with valued judgments, creating a bad/good label or somethingAssuming familiar meanings for economic termsCapital isn’t money, land isn’t dirtGraph shows relationship between two different variablesLaw of demand: decrease in price, increase in quantity demanded; high prices, quantity demanded is lowECON 1202 1st Edition Lecture 2 Outline of Last Lecture I. Introduction to EconomicsII. 3 Key Concepts of EconomicsIII. Types of Economies Outline of Current Lecture I. Microeconomics and MacroeconomicsII. Economic TermsIII. Common MisconceptionsCurrent LectureI. Microeconomics and Macroeconomicsa. Microeconomics is the study of:i. How households and firms make choicesii. How they interact in marketsiii. How the government attempts to influence their choices b. Economics studied by using models o Social science because we deal with how humans react c. Macroeconomics is the study of the economy as a whole, including topics such as inflation, unemployment, and economic growthII. Economic Terms- Technology: the processes a firm uses for turning inputs into outputs of goods and serviceso Allows us for more economic growth and moneyo Holds all the factors of production together- Capital: manufactured goods that are used to produce other goods and services- Factors of production (ingredients into the economy): These notes represent a detailed interpretation of the professor’s lecture. GradeBuddy is best used as a supplement to your own notes, not as a substitute.o Land: refers to natural resources that economy has available (i.e. farmland, climate, minerals, etc.)o Labor: workerso Capital: see aboveo Entrepreneurship: business owners Very importantIII. Common Misconceptions to avoid- Believing that economics is only about money- Confusing positive and normative analysiso Positive analysis is without valued judgment; only factso Normative analysis is with valued judgments, creating a bad/good label or something- Assuming familiar meanings for economic terms o Capital isn’t money, land isn’t dirto Graph shows relationship between two different variables o Law of demand: decrease in price, increase in quantity demanded; high prices, quantity demanded is