Economics Explained by a Stickman in 10 Minutes (P1)

Added: 2026-05-26

[00:00:00]This is a boy named Alex. Alex lives in a small town. Alex's five friends also like to eat cake, but there was only one cake left. That's called scarcity, when there isn't enough of something for everyone who wants it. Six people wanted to buy a cake at the market, but there was only one for sale. The number of people wanting to buy is greater than what's available. That's the difference between supply and demand. This is a baker named Alex. At first, Alex sold cakes for $5 each, but everyone wanted one. So, he raised the price to $20.

[00:00:29]That's called demand-pull inflation, when high demand pushes prices up. Alex uses flour, eggs, sugar, and milk to make cakes. He also pays for electricity, water, and rent for his shop. All of that costs $2 per cake.

[00:00:43]That's called cost. After selling a cake for $20 and spending $2 to make it, Alex earned $18. That's called profit. At the time, Alex was the only baker in town.

[00:00:54]Everyone had no choice but to buy from him at whatever price he set. That's called a monopoly. The other townspeople noticed baking was very profitable, so they started baking, too. Alex was worried about the competition, so he formed a gang to intimidate the other bakers, telling them to stop selling or else hand over a cut of their earnings.

[00:01:12]That's what you call the mafia. The mayor found out and sent police to arrest Alex, but Alex slipped the mayor some money and said, "Don't arrest me.

[00:01:19]I'll give you a percentage of my cake sales." The mayor agreed. That's called corruption.