What are the three basic economic concepts?

 

What are the three basic economic concepts?

The three economic concepts

Economics which is simply the study of human behaviour and how scarce resources are being manage is a very important study which requires the attention of both the government and the private business organizations for the growth and development of the society and economy as a whole. The study of economics is mainly seen in the micro and macro aspects. The micro economic talks about the individual and micro aspect of the economy, which is individual businesses and how they are been operated while the macro economics aspects sees the economy as a whole which deals with the inflation, unemployment level, and monetary policies of the monetary authorities.
Here we are going to be looking at the three major economic concept.

The three basic economic concepts are as follows:

‌Scarcity:

Scarcity refers to the limited availability of resources which is needed to solve the problems faced by the society and even the government, relative to the unlimited wants and needs of individuals and society. It is the fundamental economic problem that necessitates the allocation of resources to fulfill different purposes. Because resources are scarce, choices must be made about how to allocate them efficiently and effectively.
Because of scarcity humans are force to find ways to survive and make a living as necessity is the mother of evention. In economics the scarcity of a commodity can cause a rise in the price level of that commodity, especial when the product is an essential goods needed by the general households. This is why this economic concept is very important to study so as to find solution to such economic problems so that the society can live a good life and acquire the major necessities of life.

‌Opportunity Cost:

Opportunity cost is the value of the next best alternative foregone when a choice is made by individuals or business organizations. It is a concept that highlights the trade-offs involved in decision-making in business. When you choose one option or course of action, you inevitably forgo the benefits or opportunities associated with the next best alternative. It can be seen as forfeiting the best substitute of a products due to certain reasons. Understanding opportunity cost helps individuals and business organizations assess the benefits and drawbacks of different choices and make rational decisions that can be of gain and importance to the organisation. This economic concept is also very important for the survival of any business organizations or even the government when they are about to take a decision that will affect the general public.

‌Supply and Demand:

Supply and demand are foundational concepts in economics that explain the determination of prices and quantities of products in a market. Supply simply refers to the quantity, quality of a good or service that producers are willing and able to offer to the general public for sale at various price levels in the market. While Demand, on the other hand, represents the quantity, quality of a good or service that consumers and individuals are willing and able to buy or purchase at different price levels in the market. The interaction between supply and demand in a market determines the equilibrium price and quantity, and it is the basis for understanding market dynamics, such as shortages, surpluses, and price fluctuations. When demand is equal to supply the economy is said be be at equilibrium. Also the law of demand states that the higher the demand for a particular product thier will be an increase in the price level and vise versa. Also  when supply is high their is the tendency that the price level will reduce and vise versa. This economic concept is important because it deals with the integral part of the society which is both the producers of commodities and the consumers of those commodity. Consumers need satisfaction so they will always go for the best and affordable products available at thier disposal.

In summary this three basic economic concepts are what drive the growth and development of any society and must be taken seriously so as to achieve a good standard of living and reduce the poverty level faced by individuals and households.