Most Important Economics Concept

What is the Most Important Economics Concept?

Economics is a subject that deals with human behavior in the context of various social happenings. Consumption of goods and production of goods in the market proves how people behave in matters of supply and demand of goods and how it affects the market.

What is the most important Economics concept?

Scarcity

When we go deep into the concepts of Economics, we understand that scarcity plays a major role in supporting other concepts like supply and demand. Production of goods occurs on the basis of the demands of the consumers. The sources of production are limited but human wants are unlimited. When people demand a particular product out of a raw material, producers produces maximum quantity for the sale of the same. When the quantity increases, the prices go down and the producers turn to some other product of the same raw material for making money. This is what the trend in the market is.

For example, producers can make bread, beer from wheat or it can be used as cereal. Suppose people want more beer than bread from wheat, producers turn to make more beer than bread and thus sell the wheat product beer in the market for higher price. Thus wheat, the raw material is utilized as per the demand of the buyers and the prices go high accordingly.

Any market system is

If people demand a particular good, it is produced in maximum quantity for supply. Take the example of beer. Beer is produced out of wheat and when beer is much in demand, its production increases. As a matter of course, its quantity in the market increases as people start buying beer at a great speed. This leads to an increase in price of beer and in course of time, people are unable to meet the cost and turn to some other product, say, bread made of wheat flour. Thus, the price of beer comes down at a great speed with its supply going down and producers turning more to wheat flour for making