Basic Economics Concepts

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Economics

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The study of how individuals, businesses, and governments allocate limited resources to meet unlimited wants.

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Scarcity

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The fundamental economic problem of having seemingly unlimited human wants in a world of limited resources.

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Opportunity Cost

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The value of the next best alternative foregone when a decision is made.

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Trade-off

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A compromise where one thing is given up in exchange for something else.

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Microeconomics

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The branch of economics that focuses on the behavior of individuals and firms in making decisions.

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Market

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A system or place where buyers and sellers interact to exchange goods and services.

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Demand

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The willingness and ability of consumers to purchase goods and services at various prices.

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Supply

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The quantity of goods and services that producers are willing and able to offer at different prices.

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Equilibrium Price

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The price at which the quantity of goods supplied equals the quantity demanded.

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Elasticity

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A measure of how much the quantity demanded or supplied of a product changes when its price changes.