Introduction to Economics Concepts

Scarcity
- Limited resources vs. unlimited wants.
- Fundamental problem in economics driving choices.
Supply and Demand
- Supply: Amount of goods/services producers are willing to sell.
- Demand: Amount consumers are willing to purchase.
- Interaction determines market prices.
Opportunity Cost
- The next best alternative foregone when making a decision.
- Essential for understanding trade-offs.
Market Structures
- Perfect Competition: Many buyers and sellers, homogeneous products.
- Monopoly: Single seller dominates the market.
- Oligopoly: Few sellers with some degree of market power.
- Monopolistic Competition: Many firms selling differentiated products.
Gross Domestic Product (GDP)
- Total monetary value of all finished goods and services produced in a country.
- Indicator of economic health.
Inflation
- Rate at which general price levels rise, eroding purchasing power.
- Measured by Consumer Price Index (CPI) and Producer Price Index (PPI).
Unemployment
- Economic condition where individuals capable of working are unable to find a job.
- Types: Frictional, Structural, Cyclical, Seasonal.

Classical Economics: Free markets lead to efficient outcomes.
Keynesian Economics: Government intervention is necessary during economic downturns.
Supply-Side Economics: Economic growth is fostered by lowering taxes and decreasing regulation.
Behavioral Economics: Studies the effects of psychological factors on economic decision-making.

Fiscal Policy: Government adjusts spending and tax rates to influence the economy.
Monetary Policy: Central bank controls the money supply and interest rates to manage economic stability.

Focuses on how countries engage and benefit from trade.
Concepts include comparative advantage, trade barriers (tariffs and quotas), and exchange rates.

Leading Indicators: Predict future economic activity (e.g., stock market performance).
Lagging Indicators: Reflect the economy’s past performance (e.g., unemployment rate).
Coincident Indicators: Occur at the same time as economic trends (e.g., GDP).

Income inequality, globalization effects, climate change economics, and digital economy impacts.

Economics studies how people, businesses, and governments make decisions with limited resources to satisfy unlimited wants.
Economics analyzes the production, distribution, and consumption of goods and services.

Scarcity is the fundamental problem in economics, where unlimited wants clash with limited resources.
Scarcity forces individuals and societies to make choices.

Supply refers to the quantity of goods or services producers are willing to sell at various prices.
Demand reflects the quantity of goods or services consumers are willing to purchase at various prices.
The interaction of supply and demand determines market prices.

Opportunity cost is the value of the best alternative foregone when making a choice.
It helps us understand trade-offs and make informed decisions.

Perfect Competition: Many buyers and sellers compete with homogeneous products, resulting in no individual influence on market prices.
Monopoly: A single seller dominates the market, controlling supply and potentially setting higher prices.
Oligopoly: A few sellers have significant market power, influencing prices and competition.
Monopolistic Competition: Many firms differentiate their products to attract customers, leading to a degree of market power.

GDP is the total value of all finished goods and services produced within a country's borders during a specific period.
It is a primary indicator of economic health and growth.

Inflation is a rise in the general price level of goods and services over time, reducing purchasing power.
It is measured using indices like the Consumer Price Index (CPI) and Producer Price Index (PPI).

Unemployment refers to the situation where individuals seeking employment are unable to find jobs.
Types include frictional (transitional), structural (skills mismatch), cyclical (economic downturns), and seasonal (time-dependent).

Classical Economics: Emphasizes the efficiency of free markets and minimal government intervention.
Keynesian Economics: Advocates for government intervention, particularly during economic downturns, to stimulate demand.
Supply-Side Economics: Focuses on economic growth through tax reductions and deregulation to boost production.
Behavioral Economics: Integrates psychological factors into understanding economic decision-making.

Fiscal Policy: Government adjusts spending and tax rates to influence economic activity.
Monetary Policy: Central banks control the money supply and interest rates to manage economic stability.

International trade involves the exchange of goods and services between countries, leading to potential benefits for all.
Comparative Advantage: Countries specialize in producing goods they can produce more efficiently, allowing for increased global production.
Trade Barriers: Tariffs and quotas restrict international trade, potentially impacting economic growth.
Exchange Rates: The relative value of currencies influences the cost of imports and exports.

Leading Indicators: Provide insights into future economic activity, such as stock market performance and consumer confidence.
Lagging Indicators: Reflect the economy’s past performance, like the unemployment rate and interest rates.
Coincident Indicators: Occur simultaneously with economic trends, including GDP and industrial production.

Income Inequality: Growing disparity in income distribution within and between countries.
Globalization Effects: Economic integration with both benefits and challenges, such as job displacement and cultural shifts.
Climate Change Economics: The economic impacts of climate change and the role of markets in addressing it.
Digital Economy Impacts: The rise of technology and its influence on labor markets, productivity, and competition.