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Basic economic concepts

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Introduction to economicsScarcityScarcity and rivalryFour factors of productionEconomic modelsNormative and positive statementsLesson summary: Scarcity, choice, and opportunity costs
Practice
4 questions
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Property rights in a market system Markets and property rightsLesson overview: economic systems, the role of incentives, and the circular flow model
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Production possibilities curveOpportunity costIncreasing opportunity costThe Production Possibilities Frontier PPCs for increasing, decreasing and constant opportunity costLesson summary: the production possibilities frontier
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Comparative advantage, specialization, and gains from tradeComparative advantage and absolute advantageOpportunity cost and comparative advantage using an output tableTerms of trade and the gains from tradeInput approach to determining comparative advantage When there aren't gains from trade Comparative advantage worked example
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Test your understanding of Basic economic concepts with these 9 questions.

About this unit

In this unit, we introduce the economic way of thinking and some of the foundational concepts of economics: scarcity, tradeoffs, and comparative advantage.