Introduction to Economics

Microeconomics
- Examines individual and firm behavior.
- Analyzes supply and demand, pricing, and consumer behavior.
Macroeconomics
- Studies entire economies and large-scale economic factors.
- Topics include GDP, inflation, unemployment, and economic growth.

Supply and Demand
- Law of Demand: Price increase leads to quantity demanded decrease.
- Law of Supply: Price increase leads to quantity supplied increase.
- Equilibrium: Where supply equals demand.
Elasticity
- Price Elasticity of Demand: Responsiveness of quantity demanded to price changes.
- Inelastic vs. Elastic goods.
Opportunity Cost
- The value of the next best alternative forgone when making a choice.
Marginal Analysis
- Decision-making tool that considers additional benefits vs. additional costs.

Market Economy
- Decisions based on supply and demand; free market principles.
Command Economy
- Central authority makes all economic decisions; state-controlled.
Mixed Economy
- Combines elements of market and command economies.

Gross Domestic Product (GDP)
- Measures the total economic output of a country.
Unemployment Rate
- Percentage of the labor force that is unemployed.
Inflation Rate
- Measures the rate at which the general level of prices for goods and services rises.

Perfect Competition
- Many buyers and sellers; homogeneous products; no barriers to entry.
Monopolistic Competition
- Many firms; differentiated products; some control over pricing.
Oligopoly
- Few large firms dominate; can collude or compete.
Monopoly
- Single firm controls the entire market; significant barriers to entry.

Fiscal Policy
- Government adjustments in spending and taxation to influence the economy.
Monetary Policy
- Central bank controls the money supply and interest rates to manage economic stability.

Trade
- Benefits of trade and specialization; comparative advantage.
Exchange Rates
- Value of one currency for the purpose of conversion to another.
Globalization
- Increasing interconnectedness of economies across the world.

Economics is the study of how individuals, businesses, and societies allocate scarce resources.
Economics focuses on decision-making and trade-offs.

### Major Branches of Economics

Microeconomics focuses on individual and firm behavior, analyzing supply and demand, pricing, and consumer behavior.
Macroeconomics examines entire economies and large-scale economic factors, including GDP, inflation, unemployment, and economic growth.

### Key Concepts

Supply and Demand is the interaction of buyers and sellers in a market.
- The Law of Demand states that as the price of a good increases, the quantity demanded decreases.
- The Law of Supply states that as the price of a good increases, the quantity supplied increases.
- Equilibrium is the point where supply and demand are equal.
Elasticity refers to how responsive one variable is to changes in another.
- Price Elasticity of Demand measures the responsiveness of quantity demanded to price changes. This can be elastic (responsive) or inelastic (not responsive).
Opportunity Cost represents the value of the next best alternative forgone when making a choice.
Marginal Analysis is a decision-making tool that considers the additional benefits versus the additional costs of a decision.

### Economic Systems

Market Economy relies on supply and demand forces and free market principles for economic decision-making.
Command Economy centralizes economic decisions, with the state controlling resources and production.
Mixed Economy combines elements of both market and command economies, striking a balance between government intervention and private enterprise.

Gross Domestic Product (GDP) measures the total economic output of a country.
Unemployment Rate represents the percentage of the labor force that is unemployed.
Inflation Rate measures the rate at which the general level of prices for goods and services rises.

Perfect Competition features many buyers and sellers, homogeneous products, and no barriers to entry.
Monopolistic Competition involves many firms, differentiated products, and some control over pricing.
Oligopoly is dominated by a few large firms that can collude or compete.
Monopoly occurs when a single firm controls the entire market and there are significant barriers to entry.

Fiscal Policy refers to the government's use of spending and taxation to influence the economy.
Monetary Policy involves the central bank managing the money supply and interest rates to maintain economic stability.

### International Economics

Trade involves the exchange of goods and services between countries, benefiting from specialization and comparative advantage.
Exchange Rates represent the value of one currency relative to another, facilitating currency conversions.
Globalization describes the increasing interconnectedness of economies across the world, leading to greater trade, investment, and cultural exchange.