Basic Economic Principles, Terms, and Concepts

Scarcity refers to the limited availability of resources in relation to unlimited wants and needs.

Omdraaien

Opportunity cost is the value of the next best alternative foregone when making a choice.

Omdraaien

The law of demand states that as the price of a good or service increases, the quantity demanded decreases, and vice versa, assuming all other factors remain constant.

Omdraaien

The law of supply states that as the price of a good or service increases, the quantity supplied also increases, assuming all other factors remain constant.

Omdraaien

Equilibrium is the state in which the quantity demanded equals the quantity supplied, resulting in a stable market price.

Omdraaien

Elasticity of demand measures the responsiveness of quantity demanded to changes in price.

Omdraaien

Inflation is the sustained increase in the general price level of goods and services in an economy over time.

Omdraaien

GDP (Gross Domestic Product) is the total value of all final goods and services produced within a countrys borders in a specific time period.

Omdraaien