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Studies individual agents' decisions on resource allocation.
Limited supply cannot meet all human needs.
Value of the next best alternative forgone.
Prices and production are driven by supply and demand.
Government directs most economic decisions.
Higher prices lead to lower demand for goods.
Demand decreases as consumers prefer better substitutes.
Demand increases as prices rise, contrary to normal demand.
Higher demand for luxury goods as their prices increase.
Measures responsiveness of quantity demanded to price changes.
Overall satisfaction from all units consumed.
Rate at which one good is traded for another at constant utility.
Represents combinations of goods yielding equal satisfaction.
Changes in income, prices of related goods, and preferences.
Represents combinations of goods purchasable with fixed income.
Point where the budget line is tangent to the highest indifference curve.