After reading this chapter, you should be able to:

• Define economics and list three coordination problems that an economy must solve.
• Explain how to make decisions by comparing marginal costs and marginal benefits.
• Define opportunity cost and explain its relationship to economic reasoning.
• Explain real-world events in terms of economic forces, social forces, and political forces.
• Differentiate between microeconomics and macroeconomics.
• Distinguish among positive economics, normative economics, and the art of economics.