Economics is the study of how individuals, businesses, and governments allocate scarce resources to meet their unlimited wants and needs. There are two main branches of economics: microeconomics and macroeconomics.
Microeconomics focuses on the behavior and decision-making of individuals and firms in the market. It covers topics such as supply and demand, market structure, and price determination.
Macroeconomics, on the other hand, examines the economy as a whole, including issues such as inflation, economic growth, and unemployment. [1]
The fundamental concepts that form the basis for the study of macroeconomics include scarcity, opportunity cost, and supply and demand. Scarcity refers to the limited availability of resources in the economy, which means that choices must be made about how to allocate these resources. Opportunity cost is the cost of choosing one option over another, and it takes into account the benefits that could have been gained from the next best alternative. Supply and demand are the forces that determine the price and quantity of goods and services in a market economy.
Macroeconomics also deals with the concept of trade and how individuals and nations can engage in mutually advantageous trade. This involves understanding the principles of comparative advantage and international trade.
In summary, the fundamentals of economics include the concepts of scarcity, opportunity cost, supply and demand, and trade. These concepts form the basis for the study of both micro- and macroeconomics.