Comparative advantage is when a firm or country produces a good at a lower opportunity cost than its competitors. This does𒉰 not mean it has to produce it at a lower absolute cost, just relative to other goods it could be producing. This principle is what allows trade to enrich all participants.

Demand describes the amount of a good desired at a particular price. The demand for a good is in🌺versely proportional to its price, all things being equal.

Microeconomics is the study of economic decisions and phenomena at the level of an individual person or firm. This is in contrast with macroeconomics, which looks at economic decisions and phenomena on a larger scale, such as a whole c🤪ountry or the world.

An indifference curve is a graph that shows the array of combinations of tw๊o goods or services a person would be equally happy with. Curves are almos𒊎t always concave, due to the diminishing marginal utility of most goods.

The marginal rate of substitution is the amount of one▨ good that would be required to satisfy their demand f💎or one additional unit of a substitute good. This rate defines an indifference curve between two goods, which shows the range of combinations of goods a person would be equally happy with.

The tragedy of the commons is when a resource that everyone can access but no one owns is damaged or destroyed due to overexploitation. This is becaus🐻e no one feels responsible for maintaining the resource, as others can benefit from it for free, and therefore insufficient investment goes into maintaining it.

Utility ﷽is the technical term for happiness or enjoyment. One of the main basis o🌱f entry-level economics is that people will attempt to rationally maximize their own utility.

Marginal utility is the additional happiness or satisfaction that a consumer gets from one additional unit of a good or service. Marginal utility usually diminishes, as, for example, going from not having a car to having one car significantly expand one's ones’ opportunity, but going from one to two does not have nearly as large an impact on the consumer’s life.

Economies of scale are when a firm increases the efficiency of its production the more it produces. Not all go๊ods and services benefit from economies of scale, and production only scales to a particular level before it reverses and each unit produced decreases efficiency. This is known as a diseconomy of scale.