Book template V1.0

Economic
Concepts for
People in a Hurry

8 easy to understand economic
concepts in 12 minutes.

Economic
Concepts for
People in a Hurry

8 easy to understand economic
concepts in 12 minutes

By
Peter Lim

2018 by Peter Lim.

Book template by
Knowles Training Institute Private Limited
15 Changi Business Park Crescent
#05-06, Singapore 486006
www.Knowlesti.sg

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should be addressed to Peter Lim at [email protected]

Disclaimer

The information contained within this eBook is strictly for
educational purposes. If you wish to apply ideas
contained in this eBook, you are taking full responsibility
for your actions.

The author has made every effort to ensure the
accuracy of the information within this book was correct
at time of publication. The author does not assume and
hereby disclaims any liability to any party for any loss,
damage, or disruption caused by errors or omissions,
whether such errors or omissions result from accident,
negligence, or any other cause.

About the Author

My name is Peter Lim, I have a strong passion
for economics.

Acknowledgment

I would like to thank my undergraduate
economics teacher, Mr. Stephen Tan.

About this book

In this book, I write about the 8 most basic
economic concept that is straight to the point.

Content Page

Demand and Supply..................................................... 1
Opportunity Cost ........................................................... 3
Wants vs Needs.............................................................. 5
Scarcity ........................................................................... 7
Incentives........................................................................ 9
Trade ............................................................................. 11
Inflation ......................................................................... 13
Cost vs Benefits ............................................................ 15

Chapter One

Demand and
Supply

1

Let’s assume that a new scientific study is

published on the benefits of Pineapples. How
Pineapples cures all diseases known to man. The
news of this study spreads to all TV stations and
YouTube channels. People will then go to their

supermarkets and buy up Pineapples, so the
demand for pineapples increases.

The demand increases so much so that there isn’t
enough Pineapples to sell to all those people that
demands it. Naturally, the price of Pineapple rises.
So, the suppliers of Pineapples, which are growers

and distributes pick on price increment of
Pineapples and start producing more.

As time goes on, there will be more Pineapples in
the market then there is demand for it. Because of

this the price of Pineapple then goes back to its
original price.

2

Chapter Two

Opportunity Cost

3

Imagine just having $1. The price of 1 apple

cost $1. The price of a Kiwi cost $1 as well. If
you decided to by the apple, the opportunity

cost is the Kiwi and vice versa.

4

Chapter Three

Wants vs Needs

5

Wants are desires to own or do something.

For example, you may want a Ferrari. Needs
on the other hand are basic requirements for
human survival like water, food and shelter.

There is more demand for products or
services that are needs as compared to

wants.

6

Chapter Four

Scarcity

7

Scarcity is defined as a condition of limited

resources, where society does not have
sufficient resources to produce enough to
cater to all of the wants. Gold, for example,
is a scarce resource. There is huge demand
for Gold but it is extremely scare, as a result

the price of gold is extremely high.

8

Chapter Five

Incentives

9

Incentives are something that induces a

person to act by offering rewards to
people to change their behavior.

Incentives may be negative or a positive.
Example of positive incentive: by offering
a raise in the salary of whosoever works
harder can induce people to work harder.
Example of a negative incentive: Whereas

putting a tax on cigarettes, can induce
people to smoke less.

10

Chapter Six

Trade

11

Trade can make everyone better off. Let’s

assume you have an orange and your friend
has a pear. You feel like eating pear and your

friend an orange. You and your friend can
trade fruits. By trading with others, people

can buy a greater variety of goods or
services.

12

Chapter Seven

Inflation

13

After inflation, your dollar does not go as

far as it did in the past. If the inflation rate is
2% annually, then theoretically a $1 bar of
chocolate will cost $1.02 in a year from now.

14

Chapter Eight

Cost vs Benefits

15

Cost-benefit analysis is an approach to

making business decisions: all the benefits
are put on one side of the balance and all the

costs are put on the other. For example. if
you are planning on buying a new laptop, list

the cost on one side and the list of benefits
on the other side. If the benefits outweighs
the cost, it makes sense to buy the Laptop.

16

Economic
Concepts for
People in a Hurry

8 easy to understand economic
concepts in 12 minutes

By
Peter Lim

17