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6 Economic Concepts Consumers Should Know

Knowing basic economics allows consumers to be more informed when making financial decisions. Economics is a part of consumers’ daily lives, from going to the grocery store or filling out a loan application. Here are 6 economic concepts consumers should know: 

1. Supply and demand

When demand for a product is high, the price goes up and manufacturers make more of that product. When there is more supply of the product and less demand, the prices drop.

2. Scarcity

This refers to the gap between limited resources and the potential unlimited wants and needs of consumers.

3. Money supply

This is the amount of US currency circulating in the economy as well as in consumers’ bank accounts. Increases in money supply often result in decreased interest rates.

4. Opportunity cost

This refers to the benefits a consumer misses out on by picking one option over another.

5. Incentives

These are rewards that are offered to motivate consumers to act a certain way, such as bonuses given to employees to encourage them to work hard.

6. Costs and benefits

This is when consumers compare the benefits a product or service will give them to see if those benefits outweigh the cost.

American Consumer Credit Counseling (ACCC) is a leading source for personalized debt management advice and programs to consolidate your debt. If you are interested in consolidating debts, contact one of ACCC's credit advisors to learn how to consolidate bills without having to take a consolidation loan as would be suggested by some other debt relief agencies. As a Better Business Bureau accredited credit counseling agency, you can count on ACCC for fair and honest help with credit issues. We are also approved by the Department of Justice to provide pre-bankruptcy counseling and post-bankruptcy credit counseling courses.

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