Ch 1: Basic Economic Concepts & Terms

About This Chapter

Watch the video lessons in this chapter to learn about the role of economics in society as well as the components and types of economic models. Discover the difference between microeconomics and macroeconomics and the role of consumers in an economy.

Basic Economic Concepts & Terms - Chapter Summary

The purpose of this chapter is to introduce some basic economic concepts and show how these essential concepts build our understanding of economics. This chapter is composed of a series of video lessons taught by expert instructors who explain the difference between microeconomics and macroeconomics, how consumers affect the economy, the effects of resource scarcity and different economic models.

While watching these videos make note of any question you may come up with and ask our instructors for clarification. After you have finished these video lessons you should have a better understanding of:

  • History of economic theories
  • Effects of the economy on society
  • Areas of microeconomics and macroeconomics
  • Effects of consumer choice and resource scarcity on economies
  • Principles of allocative efficiency
  • Difference between normative and positive economics
  • Definition and limitations of free market economies
  • Comparisons between socialism, communism and mixed economies
  • Command systems in economics

This chapter also includes lesson worksheets and quizzes to fortify the material you have learned and identify areas you have not yet mastered. Review material using the jump feature in the timelines that go directly to key topics in the videos, or review entire chapters by reading over lesson transcripts.

9 Lessons in Chapter 1: Basic Economic Concepts & Terms
Test your knowledge with a 30-question chapter practice test
What is Economics? - Definition & Types

1. What is Economics? - Definition & Types

Few things affect the day-to-day lives of everyone more than the economy. In this lesson, you'll learn about economics, including some of its foundational topics and concepts. You'll also have a chance to take a quiz after the lesson.

Microeconomics vs. Macroeconomics

2. Microeconomics vs. Macroeconomics

In this lesson, we learn how economics touches every aspect of human life. Focusing on the central ideas of scarcity and utility, we see how economics plays out in its two largest fields, microeconomics and macroeconomics.

The Importance of Consumer Choice in Economics

3. The Importance of Consumer Choice in Economics

Nothing makes a business happier than when we buy something they sell - well, maybe when we buy two of what they sell! This lesson explains why smart companies and governments try to understand everything about you to sell you more.

Microeconomic Resources: Scarcity & Utility

4. Microeconomic Resources: Scarcity & Utility

For economics to work, we must assume that resources are scarce and that people will work to secure the greatest utility possible. This lesson explains both scarcity and utility and what they mean for people everywhere.

Understanding the Challenge of Resource Allocation

5. Understanding the Challenge of Resource Allocation

By now, you've probably figured out that all resources are scarce. But how do we allocate resources to make the most of that scarcity? This lesson explains how economists allocate resources, as well as three of the major philosophies influencing such choices.

Common Logic Pitfalls in Economics

6. Common Logic Pitfalls in Economics

Economics is a pretty straightforward subject, but it can be plagued with plenty of logical pitfalls. This lesson discusses swimsuits, mansions, and politicians to explain some of the most common logical fallacies.

Comparing Normative & Positive Economics

7. Comparing Normative & Positive Economics

In most sciences, you can largely ignore opinions. However, in economics, we call opinions normative statements and economists must pay attention to them. This lesson details the differences between normative statements and positive statements.

An Overview of Economic Models & Uses

8. An Overview of Economic Models & Uses

For this lesson on economic models, you won't need any plastic cement or craft knives. That said, a lot of very useful detail can still be captured and portrayed in economic models, as this lesson demonstrates.

Understanding Socialism, Communism, and Mixed Economies: Comparison & Analysis

9. Understanding Socialism, Communism, and Mixed Economies: Comparison & Analysis

Socialism and communism are alternative economic systems to capitalism. In this lesson, you'll learn some of the key concepts behind these economic systems. You'll also learn about mixed economic systems.

Chapter Practice Exam
Test your knowledge of this chapter with a 30 question practice chapter exam.
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Practice Final Exam
Test your knowledge of the entire course with a 50 question practice final exam.
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