We hope that this has given you some insight to the market and, in turn, your
investment strategies. Let's recap what we've learned in this tutorial:
Economics is best described as the study of humans behaving in
response to having only limited resources to fulfill unlimited wants and needs.
Scarcity refers to the limited resources in an economy. Macroeconomics is
the study of the economy as a whole. Microeconomics analyzes the
individual people and companies that make up the greater economy.
The Production Possibility Frontier (PPF) 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.
Demand and supply refer to the relationship price has with the quantity
consumers demand and the quantity supplied by producers. As price
increases, quantity demanded decreases and quantity supplied increases.
Elasticity tells us how much quantity demanded or supplied changes when
there is a change in price. The more the quantity changes, the more
elastic the good or service. Products whose quantity supplied or
demanded does not change much with a change in price are considered inelastic.
Utility is the amount of benefit a consumer receives from a given good or
service. Economists use utility 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
competition and many substitutes. Monopolies 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. Perfect competition represents an economy with many businesses competing with one another for consumer interest and profits.
