A rational agent considers both accounting profit and economic profit. In this video, see an example highlighting the difference between accounting profit and economic profit from a business and a discussion of explicit and implicit costs of operating a business.

In this video we illustrate and explain the differences between a change in the quantity demanded for a good (which causes a movement along a demand curve) and the change in a good's demand (which causes the entire demand curve to shift).

A demand shifter is a change that shifts the demand curve for a product. One of the demand shifters is buyers' expectations. If a buyer expects the price of a good to go down in the future, they hold off buying it today, so the demand for that good today decreases. On the other hand, if a buyer expects the price to go up in the future, the demand for the good today increases. Explore the role of buyers' expectations as a determinant of demand in this video. Created by Sal Khan.

A common error new economic students make is confusing changes in supply with changes in quantity supplied. A change in quantity supplied is a movement along the supply curve in response to a change in price. A change in supply is a shift of the entire supply curve in response to something besides price.

Previously we looked at what happens to the equilibrium price and quantity in a market if supply or demand change. In this video, we explore what happens when BOTH supply and demand are changing at the same time.

In this video, we explore how changes in a few factors affect the demand curve. Changes in income, population, and consumer preferences cause the entire demand curve to shift. Created by Sal Khan.

When supply or demand change, the price and quantity in the market changes. See how a change in demand or supply affects price and quantity in this video. Created by Sal Khan.

Trade benefits both agents when each specializes in what they have a comparative advantage in producing and trading with another agent who has a comparative advantage in something else. The gains from trade occur based on comparative advantage, not absolute advantage. Created by Sal Khan.

When two agents have differing opportunity costs, there is potential for both of the to benefit if they specialize in what they each have comparative advantage in. This video explores how two parties can get better outcomes by specializing in their comparative advantage and trading. Created by Sal Khan.

In this video we work through an example of a question like you might see on an AP microeconomics or AP Macroeconomics exam determining who has comparative advantage in producing a good using data from a table. Topics include how to calculate opportunity costs and determine who has comparative advantage based on opportunity cost.

Economic models are a way of taking complicated ideas and events and breaking them down into their most important characteristics. We use models in economics so that we can focus our attention on a few things instead of getting bogged down a lot of details. In this video, learn more about the role that models play in economics, and the importance of the assumptions that underlie those models.

Price changes the quantity supplied, but what might cause supply to increase even if price hasn't changed? In this video, we explore the determinants of supply: those factors that cause an entire supply curve to shift. Created by Sal Khan.

When there are increasing opportunity costs, the shape of the production possibilities curve (PPC) is bowed out. Learn more about how the shape of the PPC, which is sometimes also called the production possibilities frontier curve (PPF), depends on opportunity cost in this video. Created by Sal Khan.

In this video, we take a slightly different approach to determining comparative advantage because we are given data in a slightly different way. Rather than knowing how much of two goods can be produced in a day, we know how much of a resources (in this case labor) is needed to produce one unit of a good.

This course provides an introduction to the 12+ students.

In this video, we introduce the field of economics using quotes from the person that many consider to be the "father" of economics: Adam Smith. Topics include the definition of economics, microeconomics, and macroeconomics as a field and the role of assumptions in economic decisionmaking. Created by Sal Khan.

In this video, the economic concepts of utility and marginal utility are introduced.

The law of demand states that as the price of a good decreases, the quantity demanded of that good increases. In other words, the law of demand states that the demand curve, as a function of price and quantity, is always downward sloping. In this video, we explore the law of demand and its implications for graphing demand curves. Created by Sal Khan.

In this video we explore the law of supply which states that quantity supplied increases as price increases. We use a supply schedule to describe the quantities a seller is willing to sell at different prices, and then translate the supply schedule into a supply curve that illustrates the law of supply. Created by Sal Khan.