This chapter introduces the readers to basic economic concepts and ideas and their applications to the real world. After reading this chapter and working on the practice questions, the learners should be able to apply the concept of opportunity cost in real-world examples; understand key principles of economics; apply the concepts of scarcity, opportunity cost, and resource allocation to the production possibilities frontier; apply the concept of comparative advantage to real-world examples; evaluate the gains from trade; and explain the interaction between firms and households in the marketplace.