Full revision notes Macroeconomics studies focuses on the whole economy not individual markets. Positive Analysis: Descriptive statements of cause and effect. Normative Analysis: Statements that embody value judgements. Heart of economics: 1. Resources are finite 2. Wants are unlimited 3. Choices needs to be made Implication of scarcity: Having more of one good thing usually means having less of another – trade- off notion. (Opportunity cost – the best alternative foregone). Thus society must decide: what, how and for whom. Thinking on the Margin: MB > MC Absolute advantage: when someone is more efficient or productive in producing a good compared to another. Comparative advantage: when someone has an advantage in having a lower opportunity cost in producing a good compared to another. Trade can benefit both people (however one person needs comparative advantage) PPC, time element: ...