BASIC CONCEPTS
What is economics?
The study of how people use limited resources
What determines prices in the market?
Supply and demand.
Example of shortage:
PlayStation 5 or Air Jordan 1.
What is inflation?
General increase in prices.
What was Mexico’s inflation in 2025?
3.69%.
What is scarcity?
When resources are limited.
What happens when demand is greater than supply?
A shortage.
Why are winter jackets discounted in summer?
Because demand decreases.
Does inflation reduce purchasing power?
Yes.
Was inflation higher or lower than previous years?
Lower.
What is opportunity cost?
The value of the next best alternative given up
What happens when supply is greater than demand?
A surplus.
Why is bottled water usually in equilibrium?
Stores restock it regularly.
What happens when products become more expensive?
Families buy less.
What helps stabilize the economy?
Lower inflation.
What is resource allocation?
How resources are distributed among different uses.
What is equilibrium?
When supply equals demand.
What happens after Valentine’s Day with candy sales?
There is a surplus and prices decrease.
Why do businesses like stable inflation?
Because they feel more confident investing.
What institution lowered interest rates?
The central bank.
What is marginal analysis?
Evaluating additional costs and benefits.
why do prices increase during shortages?
Because many people want limited products.
Give one example of opportunity cost in student life.
Studying instead of going out.
How can inflation affect students?
School expenses become more expensive.
Name one positive effect of lower inflation.