The concept of opportunity cost occupies an important place in economic theory. The concept was first developed by Wieser. The opportunity cost of anything is the alternative that has been foregone...
Indifference curve analysis possesses certain distinguishable and unquestionable merits over Marshall’s cardinal utility analysis. Following are the undeniable merits of indifference curve analysis.
What does “Economic Facts and Fallacies” by Thomas Sowell cover, and how does it compare to economist Thomas Sowell's other books?
The law of returns to scale examines the relationship between output and the scale of inputs in the long-run, when all the inputs are increased in the same proportion.
The modern economy cannot work without money. Money is a medium of exchange, a measure of value, a store of value, and a standard of deferred payments.
What is "the fetishism of commodities"? If, as Marx posits, the social relations within capitalist society exist between commodities and not between workers, then do workers even have socail relations at all? If so, in what context? Marx asks, is a commodity valuable because human labour was expended to produce it or because it is intrinsically valuable?
This article takes an academic approach to answering frequently asked questions about the Great Recession of 2007-2008.
The Trans-Pacific Partnership is already toast; the North American Free Trade Agreement may be next as the Trump Administration is seduced by the false allure of protectionism.
I originally wrote the base paper for this hub as part of an assignment for my Econ 224 Macroeconomics class over at American InterContinental University Online. I received an A on the paper, although it was a bit of a bear for me to write. There...
Giffen goods explanation - Income and substitution effects on Giffen goods - Income and substitution effects on normal goods - Income and substitution effects on inferior goods
The law of equi-marginal utility or Gossen's second law explains how a consumer allocates his income among various commodities for getting maximum satisfaction.
The law of supply states the functional relationship between price and the quantity offered for sale. At higher prices, more sellers are interested in producing the product, and each existing seller..
Gossen, a German economist, is the first to explain the law of diminishing marginal utility based on general observations of human behavior. Therefore, the law is also termed as ‘Gossen’s first law’.
The market period is a very short period in which the supply of a commodity is fixed. It is the variations in demand that determine the price in such a market period...
An indifference curve, since it represents level of satisfaction, is a subjective phenomenon. Each person has a unique set of indifference curves. However, all indifference curves possess some...
Taxes are as old as sin, as certain as death, and as popular as a skunk at a lawn party, but they do fund social programs we all rely on.
Meaning of price effect, income effect and substitution effect - Separation of income effect and substitution effect of a price change - Slutsky's method - Hicks' method
In the process of business expansion, producers may benefit from the emergence of economies of scale. These economies are broadly classified into two types: Internal Economies and External Economies.
The BNA sees poverty in terms of consumption deprivation. But the capabilities approach looks at poverty in terms of deprivation of opportunities related to lifestyles people value.
This case examine the implications of the merger of Pepsi Co. and Quaker Oats Company for the rivalry between Coca-Cola Co. and PepsiCo, and for value creation by each firm.
The term “monetary standard” refers to the monetary system of a country. There are three main types of monetary standards...
Prof. Marshall writes that the application of marginal utility concept extends over almost every field of economics, including production, distribution, consumption, public finance, and so on.
The late 19th century was a critical time of change: social, economical, political, and more. This change resulted from the revolutions of the previous centuries. Three such revolutions in particular are the French Revolution, Scientific Revolution, and the Christian Reformation. The culmination of these three revolutions gave birth to new political, social, and economical ideologies of Capitalism, Socialism- governmental and non-governmental, and Communism/Anarchism. Each ideology broke bonds w
Hicks and Allen, in an attempt to find an alternative approach to Marshall’s utility analysis, have described the indifference curve analysis. What are the differences between the two?
What is the best way to stimulate an economy? Is it best to lower taxes or increase wages, both or neither? These are questions which both Democrat and Republican politicians debate in the course of attempting to determine the best path for growing...
Acknowledging the time value of money empowers people to make better financial decisions and become better savers and investors.
Income Effect on Consumer's Equilibrium - Substitution Effect on Consumer's Equilibrium - Price Effect on Consumer's Equilibrium - Derivation of Demand Curve from Price Consumption Curve
Law of demand states that while other things do not change, there is an inverse relationship between the price of a commodity and the quantity demanded at a specified time. In simple terms, people...
Meaning of consumer's equilibrium - assumptions - budget line or price line - indifference map - necessary conditions for consumer's equilibrium - deriving consumer's equilibrium graphically
We've all heard the terms Supply & Demand before, but how much do you really know about one of the fundamental principals of economics? In this article, we'll cover the basics everyone needs to know.
Meaning and assumptions of consumer's surplus - Measurement of consumer's surplus: The law of diminishing marginal utility approach and the indifference curve approach.
Indifference curve analysis is basically an attempt to improve cardinal utility analysis (principle of marginal utility). An indifference curve is also known as iso utility curve (“iso” means same).