Introduction to Economics

These flashcards cover fundamental concepts and definitions in economics, providing a foundational understanding of the subject.

Economics

The study of how individuals, businesses, governments, and societies make choices to satisfy their unlimited wants with limited resources.

Scarcity

The fundamental economic problem of having limited resources to meet unlimited wants.

Opportunity Cost

The cost of the next best alternative forgone when making a choice.

Microeconomics

The branch of economics that focuses on the behavior of individual economic units, such as households, firms, and individual markets.

Macroeconomics

The branch of economics that studies the economy as a whole, focusing on aggregate variables such as total output, income, employment, inflation, and government policies.

Supply and Demand

The two fundamental forces that determine the price and quantity of goods and services in a market.

Law of Demand

States that as the price of a good rises, the quantity demanded falls, and vice versa.

Law of Supply

States that as the price of a good rises, the quantity supplied increases, and vice versa.

Equilibrium Price

The price at which the quantity demanded equals the quantity supplied.

Elasticity

A measure of the responsiveness of one economic variable to changes in another.