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Understanding Economics: Key Concepts Explained

Economics is the study of how humans use limited resources to fulfill unlimited wants and needs. It examines scarcity at both the individual and overall economic levels through microeconomics and macroeconomics. The production possibility frontier model shows how an economy can optimize output through specialization and trade rather than each region being self-sufficient. Demand and supply curves demonstrate the relationship between price, quantity demanded by consumers, and quantity supplied by producers. Elasticity measures responsiveness of these quantities to price changes. Perfect competition exists in markets with many small businesses, substitutes, and low barriers to entry.

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Attila Dudas
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97 views1 page

Understanding Economics: Key Concepts Explained

Economics is the study of how humans use limited resources to fulfill unlimited wants and needs. It examines scarcity at both the individual and overall economic levels through microeconomics and macroeconomics. The production possibility frontier model shows how an economy can optimize output through specialization and trade rather than each region being self-sufficient. Demand and supply curves demonstrate the relationship between price, quantity demanded by consumers, and quantity supplied by producers. Elasticity measures responsiveness of these quantities to price changes. Perfect competition exists in markets with many small businesses, substitutes, and low barriers to entry.

Uploaded by

Attila Dudas
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Reference Multiple use is possible Max: 20 points Name:__________________________

Economics is best described as the study of humans behaving in response to having only limited __________ to fulfill
____________wants and needs.
__________refers to the limited __________ in an economy. ___________________ is the study of the economy as a
whole. Microeconomics analyzes the individual people and companies that make up the greater economy.
__________________________allows us to determine how an economy can allocate its resources in order to achieve
optimal output. Knowing this will lead countries to specialize and trade products amongst each other rather than each
producing all the products it needs.
_____________________ refer to the relationship price has with the quantity consumers demand and the quantity
supplied by producers. As price ______________, quantity demanded ______________ and quantity supplied increases.
______________tells us how much quantity demanded or supplied changes when there is a change in price. The more
the quantity changes, the more _____________ the good or service. Products whose quantity supplied or demanded
does not change much with a change in price are considered __________.
____________is the amount of benefit a consumer receives from a given good or service. Economists use ______ to
determine how an individual can get the most satisfaction out of his or her available resources. Market economies are
assumed to have many buyers and sellers, high ______________ and many _________________.
__________________characterize industries in which the supplier determines prices and high barriers prevent any
competitors from entering the market. Oligopolies are industries with a few interdependent companies.
____________________represents an economy with many ______________ competing with one another for consumer
interest and _________.

resources, elastic,
unlimited, inelastic,
Scarcity, utility,
macroeconomics, competition
the Production Possibility Frontier (PPF), substitutes
demand and supply monopolies
increases, perfect competition
decreases, businesses
elasticity, profits

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