Introduction to Economics Concepts

Scarcity:
- Limited resources versus unlimited wants.
- Drives economic decision-making.
Supply and Demand:
- Demand: Quantity of a good consumers are willing to purchase at various prices.
- Supply: Quantity producers are willing to sell at various prices.
- Equilibrium Price: Point where supply equals demand.
Opportunity Cost:
- The cost of forgoing the next best alternative when making a decision.
Market Structures:
- Perfect Competition: Many firms, identical products.
- Monopoly: Single firm controls the market.
- Oligopoly: Few firms dominate the market.
- Monopolistic Competition: Many firms sell similar but not identical products.
Economic Systems:
- Traditional Economy: Based on customs and traditions.
- Command Economy: Central government makes economic decisions.
- Market Economy: Decisions made by individuals and businesses.
- Mixed Economy: Combination of market and command economies.

Macroeconomics: Studies the economy as a whole (GDP, inflation, unemployment).
Microeconomics: Focuses on individual markets and consumer behavior.

Gross Domestic Product (GDP):
- Total value of goods and services produced in a country.
- Indicator of economic health.
Inflation Rate:
- Measure of the rate at which the general price levels of goods and services rise.
- Indicates purchasing power erosion.
Unemployment Rate:
- Percentage of the labor force that is jobless and actively seeking employment.

Fiscal Policy: Government adjustments in spending and taxation to influence the economy.
Monetary Policy: Central bank's actions to control money supply and interest rates to regulate the economy.

Externalities: Costs or benefits of a market activity borne by a third party.
Market Failure: When the allocation of goods and services is not efficient.
Trade: Exchange of goods and services; can be domestic or international.

Classical Economics: Belief in free markets and self-regulating nature.
Keynesian Economics: Advocates for active government intervention to manage economic cycles.
Supply-Side Economics: Focuses on boosting supply to stimulate economic growth.

Economics studies how individuals, businesses, and governments use limited resources to satisfy unlimited wants.
It focuses on production, distribution, and consumption of goods and services.

Scarcity is the fundamental economic problem: limited resources versus unlimited wants. It drives decision-making.
Supply and Demand:
- Demand is the quantity of a good consumers are willing to buy at different prices.
- Supply is the quantity producers are willing to sell at different prices.
- Equilibrium Price occurs when the quantity supplied equals the quantity demanded.
Opportunity Cost: The value of the best alternative forgone when making a decision.
Market Structures:
- Perfect Competition: Many firms sell identical products with no barriers to entry.
- Monopoly: A single firm controls the entire market with no close substitutes.
- Oligopoly: A few large firms dominate the market with significant barriers to entry.
- Monopolistic Competition: Many firms sell similar but differentiated products.
Economic Systems:
- Traditional Economy: Based on customs, traditions, and historical precedents.
- Command Economy: Central government controls economic activities.
- Market Economy: Individuals and businesses make independent decisions based on supply and demand.
- Mixed Economy: A blend of market and command elements.

Macroeconomics examines the overall economy, focusing on factors like GDP, inflation, and unemployment.
Microeconomics focuses on individual markets and consumer behavior, analyzing issues like pricing, production, and competition.

Gross Domestic Product (GDP): The total value of goods and services produced within a nation's borders during a specific period (usually a year). It reflects the overall economic health of a country.
Inflation Rate: Measures the rate of increase in the general price level of goods and services. It indicates the erosion of purchasing power.
Unemployment Rate: The percentage of the labor force actively seeking employment but unable to find work.

Fiscal Policy: Government actions that influence the economy through spending, taxation, and debt management. It aims to stimulate or slow economic growth.
Monetary Policy: Central bank actions to control the money supply and interest rates. It aims to stabilize the economy and combat inflation or deflation.

Externalities: Costs or benefits associated with economic activities that affect third parties not directly involved in the transaction.
Market Failure: When the market mechanism does not allocate resources efficiently, leading to suboptimal outcomes.
Trade: The exchange of goods and services between individuals, businesses, or countries. It can be domestic (within a country) or international.

Classical Economics: Emphasizes the efficiency of free markets and minimal government intervention. It assumes that the economy self-regulates and will naturally reach equilibrium.
Keynesian Economics: Advocates for active government intervention to stabilize the economy, particularly during recessions. It emphasizes demand management through fiscal and monetary policy.
Supply-Side Economics: Focuses on stimulating economic growth by reducing taxes and regulations to increase production and investment. It assumes that supply drives economic growth.

Globalization: Interconnectedness of economies worldwide, impacting local markets and labor forces.
Income Inequality: Growing disparities in income distribution, raising social and economic concerns.
Environmental Economics: Considering the economic impact of environmental issues and promoting sustainable development.