Author: Saim Khalid

The law of supply states that, all else being equal, when the price of a product rises, the quantity supplied also rises; when the price falls, the quantity supplied decreases. Formulaically:Supply is directly related to price. Why does this happen? Example:If the price of wheat increases, farmers will be motivated to grow more wheat next…

The law of demand states that, all else being equal, when the price of a product falls, the quantity demanded rises; when the price rises, the quantity demanded falls. Formulaically:Demand is inversely related to price. Why does this happen? Example:If the price of apples drops from $3 to $2 per kg, more people will buy…

Unlike physics or chemistry, economics deals with human beings whose behavior is unpredictable. For example:

Both are important because policymakers need facts (positive) as well as social goals (normative).

Case Study 1: COVID-19 Pandemic (2020) The global pandemic highlighted the importance of economics. Governments had to make tough choices: The crisis showed how scarcity and choice are central to economic decision-making. Case Study 2: Oil Price Fluctuations When oil prices rise, transportation becomes expensive. This leads to higher prices of food and goods. Economists…

A. Importance for Individuals B. Importance for Businesses C. Importance for Governments D. Importance for Global Society

Economics can be divided into different areas of study:

Every economy, whether small like a village or large like a country, must answer three central questions: Different economic systems (capitalism, socialism, mixed economy) answer these questions in different ways.

The subject of economics has evolved through centuries.