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Economics Notes

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Economics Notes

Uploaded by

erinpatel54
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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Economics Notes

1. Basic Concepts

 Economics: The study of how people use resources to satisfy their needs and wants.
 Scarcity: Limited resources relative to unlimited human wants.
 Opportunity Cost: The cost of choosing one option over the next best alternative.
 Microeconomics: The study of individual markets and actors (households, firms).
 Macroeconomics: The study of the economy as a whole (inflation, unemployment,
GDP).

2. Demand and Supply

 Demand: The quantity of a good or service consumers are willing to buy at various
prices.
 Law of Demand: As price decreases, quantity demanded increases.
 Supply: The quantity of a good or service that producers are willing to sell at
different prices.
 Law of Supply: As price increases, quantity supplied increases.
 Market Equilibrium: The point where demand and supply curves intersect.

3. Elasticity

 Price Elasticity of Demand (PED): Measures how responsive the quantity demanded
is to a price change.
 Price Elasticity of Supply (PES): Measures how responsive the quantity supplied is
to a price change.
 Income Elasticity: Measures the responsiveness of demand to changes in consumer
income.
 Cross-Price Elasticity: Measures the responsiveness of demand for a good to a price
change of a related good.

4. Market Structures

 Perfect Competition: Many firms, identical products, no barriers to entry.


 Monopolistic Competition: Many firms, differentiated products, low barriers to
entry.
 Oligopoly: Few firms, high barriers to entry, potential for collusion.
 Monopoly: One firm, high barriers to entry, price maker.

5. Macroeconomics

 Gross Domestic Product (GDP): The total value of goods and services produced in
an economy.
 Inflation: The general increase in prices and decrease in the purchasing power of
money.
 Unemployment: The state of being able to work but unable to find a job.
 Fiscal Policy: Government spending and taxation decisions.
 Monetary Policy: Central bank actions (e.g., interest ra

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