ECONOMICS Study Guide - Final Guide: Opportunity Cost, Monopolistic Competition, Luxury Vehicle

• School: Mahatma Gandhi University - Kerala
• Department: Humanities
• Course: ECONOMICS

Document Summary

Fundamentals of economics: explaining basic terms with examples. Economics is the social science that studies the production, distribution, and consumption of goods and services. It involves analyzing how individuals, businesses, and governments make choices to allocate limited resources to satisfy unlimited wants and needs. To understand the fundamentals of economics, let"s explore some of the key terms and concepts in detail: scarcity: Scarcity refers to the fundamental problem of limited resources relative to unlimited wants and needs. It means that there are not enough resources available to satisfy all human desires. For example, the scarcity of water in a drought-affected region highlights the limited supply of this essential resource compared to the demand for it: opportunity cost: Opportunity cost is the value of the next best alternative foregone when making a choice. It represents the trade-offs we face when allocating resources.