Category:Basic Assumptions of Economics

==Economics is a social science that studies how individuals, governments, firms and nations make choices on allocating scarce resources to satisfy their unlimited wants. Economics can generally be broken down into:   macroeconomics, which concentrates on the behavior of the aggregate economy; and   microeconomics, which focuses on individual consumers. ==

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 * Scarcity
 *  The basic economic problem that arises because people have unlimited wants but resources are limited. Because of scarcity, various economic decisions must be made to allocate resources efficiently
 * Trade Offs
 * ​When we sacrifice one thing to obtain another, that's called a  trade-off . Only have enough cash to buy a bike  or a snowboard, but not both?  That's a trade-off.  Trying to decide whether to take the Fourth of July off to spend with your family, or to go to work and make extra overtime?  That's a trade-off.
 * Opportunity Cost
 * ​Trade-offs create  opportunity costs , one of the most important concepts in economics.  Whenever you make a trade-off, the thing that you do not choose is your opportunity cost.
 * The cost of an alternative that must be forgone in order to pursue a certain action. Put another way, the benefits you could have received by taking an alternative action.
 * Rationality
 * Gains from Trade

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