Economic Incentives: Something that motivates an individual to perform an action; possibly perform an action more efficiently or quicker.

Economic theory influences government's decision making process for public policy. The theory can be spot on, the legislation can be spot on, but if the incentives aren't properly alligned, then the public policy will have limited success.

Microeconomics: analyzes the market behavior of individual consumers and firms in an attempt to understand the decision-making process of firms and households. It is concerned with the interaction between individual buyers and sellers and the factors that influence the choices made by buyers and sellers.

Macroeconomics: Is the study of the behavior and performance of an economy as a whole. It focuses on the aggregate changes in the economy such as unemployment, growth rate, gross domestic product and inflation.

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This is a summary of the first crash course economics video.