About Economics Basics
Economics studies choices involving scarce resources. Individuals, businesses, and governments decide how to use time, labor, land, capital, technology, and money while responding to incentives and constraints.
Scarcity
Scarcity means resources are limited relative to wants.
Learn MoreOpportunity Cost
Opportunity cost is the value of the best alternative not chosen.
Learn MoreDemand
Demand describes how much buyers are willing and able to purchase at different prices.
Learn MoreSupply
Supply describes how much sellers are willing and able to offer at different prices.
Learn MorePrices
Prices help coordinate decisions.
Learn MoreInflation
Inflation is a broad increase in prices over time.
Learn MoreEmployment
Labor markets connect workers and employers.
Learn MoreProductivity
Productivity measures output relative to inputs.
Learn MoreScarcity
Because time and resources are limited, choosing one option usually means giving up another.
Opportunity Cost
Money is only part of cost. Time, convenience, risk, and missed alternatives matter too.
Demand
Many factors besides price affect demand, including income, preferences, expectations, and prices of related goods.
Supply
Costs, technology, taxes, weather, capacity, and expectations can shift supply.
Prices
High prices can encourage more supply and less demand, while low prices can do the opposite, though real markets have many complications.
Inflation
Economists track price indexes to estimate changes in average consumer costs.
Employment
Wages depend on skills, productivity, bargaining power, labor demand, location, institutions, and many other factors.
Productivity
Technology, skills, organization, infrastructure, and capital can raise how much is produced from the same amount of work.