ECC2010
Economics is the study of how societies allocate scarce resources among competing uses. It is
concerned with the production, distribution, and consumption of goods and services.
There are two main branches of economics: microeconomics and macroeconomics. Microeconomics
deals with the behavior of individual consumers, firms, and markets, while macroeconomics deals
with the economy as a whole, including topics such as inflation, unemployment, and economic
growth.
The basic economic problem is scarcity, which means that there are not enough resources to satisfy
all of society's wants and needs. As a result, people must make choices about how to allocate
resources.
Opportunity cost is the cost of the next best alternative foregone. It is an important concept in
economics because it helps individuals and businesses make decisions about how to allocate scarce
resources.
Supply and demand are the two most important concepts in microeconomics. Supply refers to the
amount of a good or service that producers are willing and able to sell at a given price, while demand
refers to the amount of a good or service that consumers are willing and able to buy at a given price.
Market equilibrium occurs when the quantity of a good or service supplied is equal to the quantity
demanded. At this point, there is no excess supply or demand, and the market clears at a certain
price.
In macroeconomics, GDP (Gross Domestic Product) is the most commonly used measure of economic
activity. It measures the total value of goods and services produced within a country's borders in a
given period of time.
Monetary policy and fiscal policy are the two main tools used by governments to manage the
economy. Monetary policy involves the management of the money supply and interest rates by a
central bank, while fiscal policy involves government spending and taxation.
International trade is an important aspect of economics, as it allows countries to specialize in
producing the goods and services they are most efficient at producing and trade with other countries
to obtain goods and services they cannot produce efficiently.
These are just some basic notes on economics, but there is much more to learn and explore in this
fascinating field.