Basic economics concepts

Scarcity

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Introduction to economics
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Scarcity
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Normative and positive statements
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Economic models
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Command and market economies
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Lesson summary: Introduction to Macroeconomics
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Practice

Introduction to scarcity and the economic way of thinkingGet 3 of 4 questions to level up!

Opportunity cost and the Production Possibilities Curve

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Production possibilities curve
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Opportunity cost
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Increasing opportunity cost
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PPCs for increasing, decreasing and constant opportunity cost
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Production Possibilities Curve as a model of a country's economy
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Lesson summary: Opportunity cost and the PPC
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Practice

Opportunity cost and the PPCGet 3 of 4 questions to level up!

Comparative advantage and the gains from trade

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Comparative advantage, specialization, and gains from trade
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Comparative advantage and absolute advantage
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Opportunity cost and comparative advantage using an output table
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Terms of trade and the gains from trade
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Input approach to determining comparative advantage
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When there aren't gains from trade
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Comparative advantage worked example
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Lesson summary: Comparative advantage and gains from trade
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Practice

Comparative advantage and the gains from tradeGet 3 of 4 questions to level up!

Demand

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Law of demand
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Price of related products and demand
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Change in expected future prices and demand
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Changes in income, population, or preferences
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Normal and inferior goods
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Change in demand versus change in quantity demanded
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Lesson summary: Demand and the determinants of demand
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Practice

DemandGet 3 of 4 questions to level up!

Supply

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Law of supply
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Factors affecting supply
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Change in supply versus change in quantity supplied
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Lesson summary: Supply and its determinants
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Practice

SupplyGet 3 of 4 questions to level up!

Market equilibrium, disequilibrium, and changes in equilibrium

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Market equilibrium
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Changes in market equilibrium
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Changes in equilibrium price and quantity when supply and demand change
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Lesson summary: Market equilibrium, disequilibrium, and changes in equilibrium
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Practice

Market equilibrium and disequilibriumGet 5 of 7 questions to level up!
Changes in equilibriumGet 5 of 7 questions to level up!

About this unit

In this unit, you'll learn fundamental economic concepts like scarcity, opportunity cost, and supply and demand. You will learn things like the distinction between absolute and comparative advantage, how to identify comparative advantage from differences in opportunity costs, and how to apply the principle of comparative advantage to determine the basis on which mutually advantageous trade can take place between individuals and/or countries.