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- Basic concepts of economics include:
- Scarcity: the condition that arises when human wants exceed the available resources
- Scarcity forces us to make choices among different alternatives.
- Scarcity applies to all resources, such as land, labor, capital, Etc.
- Scarcity is a relative concept that depends on the demand and supply of resources
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Choice
: the act of selecting one option among many alternatives
- Choice involves weighing the costs and benefits of different options.
- Choice reflects the preferences and values of individuals and society.
- Choice is influenced by various factors, such as income, price, information, etc.
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Choice
: the act of selecting one option among many alternatives
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Goods and services:
the outputs or products that are produced to satisfy human wants and needs.
- Goods are physical, tangible objects that can be seen and touched.
- Services are intangible activities that cannot be seen or touched.
- Goods and services can be classified into consumer goods and services (such as food, clothing, education, etc.) and producer goods and services (such as raw materials, machinery, transportation, etc.)
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Goods and services:
the outputs or products that are produced to satisfy human wants and needs.
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Production
: the process of transforming resources into goods and services
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- Production involves combining and transforming resources in different ways.
- Production requires technology, which is the knowledge and skills used to produce goods and services.
- Production can be measured by concepts such as output, which is the quantity of goods and services produced; or productivity, which is the ratio of output to input.
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- Opportunity cost : It means what we give up when we choose one thing over another.
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- For example, suppose you have $10 and you want to buy a candy bar or an ice cream. You can only buy one of them because you don't have enough money for both. If you choose to buy a candy bar, the opportunity cost is the ice cream that you could have bought instead. If you choose to buy an ice cream, the opportunity cost is the candy bar that you could have bought instead.
- Opportunity cost helps us to compare different choices and see what we are missing out on when we make a decision. It also helps us to think about the value of our choices and how they affect our happiness and well-being.
- Opportunity cost is subjective and varies from person to person.
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