- Scarce Resources. The resources available in the economy are always in a condition of scarcity because they are not present or available in the quantity and quality needed at all times.
- Factors of Production. In the production of goods and services, the essential factors are land, labor, capital, management, technology and governmental policy.
- Economic Return. The factors of production have the purpose of getting their own reward for involvement in economic activities.
- Human Wants. Human beings in society have needs that must be satisfied within the economy. they include such basic requirments for life and human dignity as food, clothing, shelter, health, education and entertainment.
- Choice of Consumption. The individual in society has a freedom of choice on the kind, quantity, quality and price of the goods and services to be consumed.
- The Price System. The economy is structured in such a way that goods and services flow within the given society with prices attached to them.
- Demand Elasticity. When the price of an item in the market is reduced, the demand increases quantitatively.
- Diminishing Utility or Satisfaction. In the consumption of goods and services, the consumer will enjoy an increasing satisfaction only up to a point where every additional unit consumed about less and less diminishing satisfaction.
- Competition. This refers to the rivalry among sellers who wish to dominate the market.
- Market Economy. Where trade may freely take place with the least interference from the government.
- Break-even Point. Firms gets informed about making a profit from a business activity.
