This chapter discusses the economic concepts of scarcity, allocation mechanisms, opportunity cost, demand and supply curves, and equilibrium. It explains that scarcity means resources are limited and not enough to satisfy everyone, so allocation mechanisms like prices are needed. Demand curves show the relationship between price and quantity demanded, and usually slope downward, while supply curves show the positive relationship between price and quantity supplied. The intersection of the supply and demand curves indicates the equilibrium price and quantity in the market.