Intro to Economics
Economics is defined as how societies use scarce resources to produce valuable commodities and distribute them among people.
The key word in that sentence is "scarce". This relates with opportunity cost, which is the cost that it takes to pursue an opportunity.
Vocab: commodities- something of use (valuable)
Essential questions-
What goods are produced?
What resources are used to produce the goods?
Who gets to consume these produced goods?
Opportunity cost is the cost of an opportunity, essentially.
(e.g. If you had 5 weeks to do one of two projects and you could choose either project to do, and you chose to do project 1, but not project 2, then your opportunity cost would be project 2. This is because you could've done project 2, but instead you chose to do project 1 with the sacrifice of not being able to do project 2.)
The general definition of Economics is the "creation of abundance". The main idea of this definition is to create the most out of a certain amount of things. (hence "scarce"). Mutual advantages allow more to be accomplished/created out of a set amount of items.
Microeconomics- the behaviour of individual consumers and firms
Macroeconomics- the behaviour of the economy as a whole.
Law of downward-sloping demand-when the price rises, the quantity demanded drops, as long as all else is held constant.
Shifts in the demand curve, the main downward-sloping line in the picture, are caused by mostly 3 things. These things are a change in income, quality change or price change of a competing product.
