Key Concepts in Economics

Economics: The study of how individuals, businesses, and governments allocate scarce resources.
Scarcity: Limited availability of resources relative to unlimited wants.
Opportunity Cost: The value of the next best alternative that is foregone when making a choice.

Microeconomics:
- Focuses on individual consumers and businesses.
- Analyzes market behavior, pricing strategies, and demand/supply dynamics.
Macroeconomics:
- Examines large-scale economic factors.
- Concerns overall economic growth, inflation, unemployment, and government policies.

Supply and Demand:
- The relationship between how much of a good is available (supply) and how much consumers want it (demand).
- Equilibrium is achieved when supply equals demand.
Market Structures:
- Perfect Competition: Many sellers and buyers; identical products.
- Monopoly: Single seller dominates the market.
- Oligopoly: Few sellers; products may be identical or differentiated.
- Monopolistic Competition: Many sellers with differentiated products.

Gross Domestic Product (GDP): Total value of goods and services produced in a country.
Inflation Rate: The rate at which the general level of prices for goods and services rises.
Unemployment Rate: Percentage of the labor force that is jobless and actively seeking work.

Fiscal Policy: Government spending and tax policies to influence economic conditions.
Monetary Policy: Central bank actions (like adjusting interest rates) to control the money supply and stabilize the economy.

Comparative Advantage: The ability of a country to produce a good at a lower opportunity cost than another.
Balance of Trade: Difference between a country’s exports and imports.
Exchange Rates: The value of one currency for the purpose of conversion to another.

Classical Economics: Advocates for free markets and minimal government intervention.
Keynesian Economics: Emphasizes the role of government in stabilizing the economy through fiscal and monetary policies.
Supply-Side Economics: Focuses on boosting economic growth by increasing the supply of goods and decreasing taxes.

Circular Flow Model: Illustrates how money moves through an economy between households and businesses.
PPC (Production Possibilities Curve): Shows the maximum possible output of two goods given resources and technology.

Globalization: Increasing interconnectedness of economies through trade, investment, and technology.
Sustainability: Economic practices that aim to meet present needs without compromising future generations.
Inequality: Economic disparities in income and wealth among different groups in society.

Economics studies how individuals, businesses, and governments allocate scarce resources.
Scarcity refers to the limited availability of resources compared to unlimited wants.
Opportunity cost is the value of the next best alternative given up when choosing something else.

Microeconomics focuses on individual consumers and businesses, analyzing market behavior, pricing strategies, and demand/supply dynamics.
Macroeconomics examines large-scale economic factors such as overall economic growth, inflation, unemployment, and government policies.

Supply and Demand describes the relationship between the available quantity of a good (supply) and consumer desire for it (demand).
Equilibrium occurs when supply and demand balance.
Market Structures categorize markets based on the number of sellers and the degree of product differentiation, including:
- Perfect Competition: Many sellers and buyers trading identical products.
- Monopoly: Single seller dominating the market.
- Oligopoly: Few sellers with potential product similarity or differentiation.
- Monopolistic Competition: Many sellers offering differentiated products.

Gross Domestic Product (GDP) measures the total value of goods and services produced within a country.
Inflation Rate reflects the rate at which the general price level for goods and services rises.
Unemployment Rate represents the percentage of the labor force actively seeking work but without jobs.

Fiscal Policy uses government spending and tax policies to influence the economy.
Monetary Policy employs actions by the central bank, like adjusting interest rates, to control the money supply and stabilize the economy.

Comparative Advantage occurs when a country produces a good at a lower opportunity cost than another.
Balance of Trade reflects the difference between a country's exports and imports.
Exchange Rates determine the value of one currency in relation to another for conversion purposes.

Classical Economics advocates for free markets with minimal government intervention.
Keynesian Economics emphasizes the government's role in stabilizing the economy through fiscal and monetary policies.
Supply-Side Economics focuses on boosting economic growth by increasing the supply of goods and decreasing taxes.

Circular Flow Model illustrates the movement of money within an economy between households and businesses.
PPC (Production Possibilities Curve) displays the maximum possible output of two goods given available resources and technology.

Globalization involves increased interconnectedness of economies through trade, investment, and technology.
Sustainability promotes economic practices that meet present needs without harming future generations.
Inequality refers to economic disparities in income and wealth among different groups within society.