1. What is Economics? Economics can be defined as the Social Science concerned with the Problem of administering or using Scarce Resources so as to attain the greatest or maximum fulfillment of society’s Unlimited Wants.

2. Factors of Production  Natural Resources: land, minerals, water, forests, etc.;  Labor: both physical and mental;  Physical Capital: machines, tools, buildings, trucks, etc.;  Human Capital: knowledge, education; know how; and  Entrepreneurship: the ability to organize a production process and take risks.

3. What is Microeconomics? Branch of economics that deals with the behavior of individual economic units- consumers, business firms, workers, and investors-as well as the markets that these units comprise. Microeconomics is about the allocation of scarce resources.

4. Decision Makers  Households: the principal owners of factors of production;  Business Firms: the principal users of factors of production; and  Central Authorities: the federal, state, and local governments and their agencies.