An economy is a system for using resources.
A country's economy is based on:
It's religious and cultural background.
It's history.
It's values.
All of these combine into one of the following types of economies:
1) Traditional 2) Command 3) Free Market (free enterprise)

A traditional economy is one which is based upon past practices, often

involving trade, or barter, systems.  Often found in 3rd World nations

Capitalism vs. Communism represent 2 opposing economic systems
of  free enterprise vs. command economy

free enterprise: the freedom of private businesses to operate
competitively for profit, with minimal government regulation

command economy: the government makes all economic decisions

FREE ENTERPRISE

ECONOMICS: Your wants and needs are unlimited;
your resources are limited;
therefore, CHOICES have to be made

Decisions are based on economics:
Economics is what's best for you, based upon:
1. the pocketbook, (your resources)
2. the heart, (what you feel about something - emotions)
3. the mind, (what you think about somehting - logic)

SCARCITY: a basic economic concept: we must fulfill our unlimited wants
No matter what we have we can always think of something else we would like.
What were once luxuries now appear to be needs.
So scarcity will always exist.
Scarcity exists because people cannot have everything they want.

- a shortage of goods results in a higher demand and a rise in price
for those goods, (or, another way to say it):

- the greater the demand, combined with scarcity of supply, results
in a higher price for those goods

OPPORTUNITY COST: what you have to GIVE UP to obtain what you want

For anything you want, you have to be willing to pay the
opportunity cost.

Economists are always most interested in the opportunity cost.