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Competition is what keeps people improving. If there wasn't competition, video game companies wouldn't be spurred on to create better games. When something new is created, everyone else will be fighting for the same spotlight.

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If something is scarce, there's not a large amount of that thing. In video games, the things that are scarce are usually very rare, therefore are worth a lot of money. Similar to the real world, if there's a game lots of people want, the price will go up as more people want to buy it before it sells out. If there's a game that not many people want though, the price will go down in an attempt to sell it. Even in the video game universe, there are some rare and powerful items that can be sold for lots of money

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Unfortunately, we can't do so many things all at the same time. So we always choose to do one action instead of another. Like how I choose to play video games instead of studying, or chose to write about video games for this project like a nerd instead of something else.
Of course every choice have consequences. If I play video games instead of studying, I'll get further in my game, but I won't be prepared for the test tomorrow.

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Money is important even in video games. It's hard to advance without items, and those items of course cost money. In Fire Emblem, you need to pay for weapons with gold you earns from battles. Iron Weapons are the cheapest and weakest weapons, but as the weapons get more powerful, the prices go up.

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One of the most crucial things in video games are incentives. Without them, there wouldn't be any reason to play said video games. Incentives are goals or reasons for someone to do certain tasks. In video games, these goals can range from training to get a Gym Badge in Pokemon, or solving puzzles to open secret doors in The Legend of Zelda.
Now disincentives are the opposite of incentives. They are threats or reasons for someone to not do something. Examples are having very powerful enemies to make sure you enter an area while under leveled in Earthbound, or having food surrounded in dangerous obstacles in Pikmin.

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Economics apply to all things in life. The term is mostly associated with money, but it also involves the study of decision making. Video games are all about making decisions, so many of the economic traits apply to them.