Economics Questions and Answers

Economics

A current event that provides an example of microeconomics could be the Apple Company’s introduction of the latest version of its iPhone, the iPhone 8. Microeconomics, in contrast to...

Latest answer posted October 25, 2017 11:35 pm UTC

2 educator answers

Economics

The major impact of inflation on luxuries is to reduce consumers' demand for luxury goods and services. Inflation is defined as an increase in the general price level of goods and services in an...

Latest answer posted August 22, 2011 10:46 pm UTC

1 educator answer

Economics

The gross domestic product (GDP) of Canada is defined as the value of all goods and services produced in a year. It's often used to measure the economic progress of a country - when the GDP value...

Latest answer posted October 14, 2018 6:17 pm UTC

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Economics

If there were no scarcity in the world, there would also be no economy. The reason for this is that without scarcity, there is no such thing as economics and there is no such thing as an economic...

Latest answer posted January 26, 2013 7:59 pm UTC

1 educator answer

Economics

The Consumer Price Index (CPI) is a measurement of consumer prices on a certain chosen group (sometimes called a "basket") of goods. Like other such measurements, it is an economic indicator....

Latest answer posted April 22, 2019 4:09 am UTC

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Economics

John Maynard Keynes was a firm believer in the government's role in stabilizing the economy and in minimizing unemployment. In contrast to many free-market theorists, who held to the belief that...

Latest answer posted March 7, 2017 2:10 am UTC

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Economics

Let's first look at the basic four market structure types. The first market structure type is the perfect competition structure. If I'm honest, this exists in theory only. This market type is...

Latest answer posted February 27, 2019 1:15 am UTC

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Economics

Economic globalization directly leads to economic inequalities between the nations of the global north, or "developed" nations, and the nations of the global south, or "developing" nations. Through...

Latest answer posted January 14, 2019 8:21 pm UTC

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Economics

The correct answer is B, measuring the impact of tax policies on total consumer spending in the economy. This is a macroeconomic issue because the statement talks about tax policies which are...

Latest answer posted July 6, 2015 5:34 am UTC

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Economics

In a capitalist society, the more a business owner or freelancer works, the more money he or she will earn. This serves his or her own self-interest, because he or she will have more money to...

Latest answer posted October 5, 2018 11:26 am UTC

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Economics

“Opportunity cost is the profit lost when one alternative is selected over another.” In other words, opportunity cost is what someone gives up to gain something else. Therefore, in light of your...

Latest answer posted January 6, 2021 2:47 am UTC

1 educator answer

Economics

It's also difficult to consider without defining a lot of the terms you are talking about. In this case, "pure monopoly" could take a few meanings, and you have the same issue with "compete." The...

Latest answer posted January 23, 2012 1:04 am UTC

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Economics

There are many points that must be brought up in answering this very interesting question. First, we must realize that economics does not claim that people choose their goals rationally, only that...

Latest answer posted January 10, 2013 8:26 pm UTC

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Economics

Social security can be a polarizing topic in the United States. Politicians from both major parties constantly portray social security as unsustainable. It might be worth wondering why politicians...

Latest answer posted January 29, 2021 7:10 pm UTC

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Economics

In a free market economy, supply and demand are able to adjust through the price-signaling mechanism to achieve allocative efficiency, in which the price is equal to the marginal cost of...

Latest answer posted January 29, 2019 11:24 pm UTC

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Economics

A recession in the United States could certainly trigger a recession abroad, just as economic problems in other countries could cause problems in the US. The world economy is extremely globalized...

Latest answer posted September 26, 2012 2:44 am UTC

1 educator answer

Economics

The income effect is the factor that causes the demand curve to slope downward. It is called the income effect because a change in the price of goods changes the purchasing power of a person’s...

Latest answer posted October 3, 2013 10:47 pm UTC

1 educator answer

Economics

There are two major consequences of this. First, the people in that economy will be able to buy imports more cheaply. Their currency will be worth more of other currencies than it once was so ever...

Latest answer posted March 27, 2012 12:53 am UTC

1 educator answer

Economics

In order to answer this question, we first have to understand what marginal cost is. In economics, marginal cost refers to how much a firm’s costs change when its output goes up. In other words, it...

Latest answer posted July 13, 2016 10:20 pm UTC

1 educator answer

Economics

Country X conducts 60% of its trade with country Y and 40% of its trade with country Z. The initial value of the trade weighted exchange rate index of country X is 100. The value of X's currency...

Latest answer posted May 17, 2015 5:10 pm UTC

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Economics

If foreign consumer income rises then domestic aggregate expenditures and demand will, all other things being equal, rise. The reason for this is that foreign demand for imports will rise. Let us...

Latest answer posted December 14, 2015 5:06 am UTC

1 educator answer

Economics

To understand the relationship between investment spending and the equilibrium GDP, the MPC (or "marginal propensity to consume") is used. This number relates directly between the amount of cash...

Latest answer posted July 16, 2019 6:21 pm UTC

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Economics

Of the choices given here, the best choice is A, the goods market. The exact name of this market will vary from diagram to diagram, but “goods market” is the only one of the choices given that can...

Latest answer posted October 1, 2012 4:00 am UTC

1 educator answer

Economics

According to classical economic theory, as exemplified in Adam Smith’s Wealth of Nations, published in 1776, the market is self-regulating and achieves equilibrium when it is free and without...

Latest answer posted April 4, 2019 3:17 pm UTC

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Economics

No, it is often not true. An increase in demand can be very destructive socially, morally, or in human costs. An increase in guns means an increase in fear and insecurity. In private hands, it...

Latest answer posted June 14, 2019 11:40 am UTC

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Economics

The benefits of using a computer in a business far outweigh any of the pitfalls. The computer gives you access to the Internet, which makes it much easier to communicate with different employees...

Latest answer posted April 27, 2016 4:22 pm UTC

1 educator answer

Economics

The three basic functions of money are Medium of exchange. This means that it can be used to buy things. This is more efficient than a barter system in which no one commodity can always be used...

Latest answer posted January 30, 2012 10:49 pm UTC

1 educator answer

Economics

The major difference here is in who decides how the shoes will be made and how many of them will be made. In a command economy, the government would determine how many shoes would be needed in a...

Latest answer posted June 5, 2012 9:41 pm UTC

1 educator answer

Economics

Branding is not always necessary in a market that is an oligopoly. However, branding can be essential in many oligopolies. A firm in an oligopoly can sell a differentiated product or it can sell a...

Latest answer posted August 25, 2011 9:05 am UTC

1 educator answer

Economics

The ice cream industry does not fit the oligopoly model very well. In an oligopoly, there are only a very few sellers of a given product. The sellers are all so big in terms of market share that...

Latest answer posted October 11, 2012 3:06 pm UTC

1 educator answer

Economics

The term "free lunch" was a common phrase in the United States from the mid 19th century onward. Interestingly, it wasn't a term that was used to describe meals being handed out to homeless...

Latest answer posted March 9, 2019 1:38 am UTC

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Economics

Before we can tell you what an “elasticity of one” means, we should probably spend some time on elasticity by itself. What is elasticity? Perhaps the word itself gives us a hint. If something is...

Latest answer posted July 30, 2020 2:07 pm UTC

1 educator answer

Economics

There are numerous limits to long-term economic growth. Climate change and other forms of environmental catastrophe are serious threats, particularly as so many of the economic powerhouses of the...

Latest answer posted September 13, 2020 8:50 pm UTC

1 educator answer

Economics

Some products people need no matter what. They don't buy less when the price goes up. These products have inelastic demand because the price has no effect on the demand. However, if the price...

Latest answer posted September 30, 2012 3:47 am UTC

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Economics

The law of diminishing returns states that, in the short term, the profit to be gained from a particular product or process decreases after a certain level of investment, either of money or energy....

Latest answer posted February 20, 2020 12:43 pm UTC

1 educator answer

Economics

In economics, the situation that you mention here is called “diseconomies of scale.” It is the opposite of economies of scale. In the case of economies of scale, large companies are able to...

Latest answer posted May 31, 2013 3:55 pm UTC

1 educator answer

Economics

In Economics, a concept called "Opportunity costs" plays a very important role. This refers to what one could earn if the same resources were put to another use and conversely what is being lost...

Latest answer posted June 4, 2011 11:39 pm UTC

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Economics

There can be scarcity in a land of abundance because scarcity exists in all places at all times. We can never have everything we want and we can never have the time to do everything we want. We...

Latest answer posted January 31, 2012 9:46 am UTC

1 educator answer

Economics

In economics, price is the amount of money or compensation one consumer is willing to give in order to obtain and receive a good or a service. The expenses incurred in producing and selling the...

Latest answer posted January 9, 2019 8:18 am UTC

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Economics

When there is a shortage of a particular good or service in the marketplace, the price of that good or service goes up. A shortage of a good or service means more people want that good or service...

Latest answer posted November 12, 2016 8:11 pm UTC

1 educator answer

Economics

The recessionary gap is the difference between what the government desires and what is currently demanded. Since the government wants $15 trillion, and there is currently a demand of $14 trillion,...

Latest answer posted August 26, 2019 9:00 pm UTC

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Economics

There is much debate from economists, historians, and political scientists about how an economy recovers from structural unemployment. Much of the discussion centers around the role of government,...

Latest answer posted October 17, 2020 1:24 pm UTC

1 educator answer

Economics

The life- cycle hypothesis helps to explain the habits of individual spending and saving. The hypothesis explores a typical pattern for individual saving over their lifetime in relation to debt...

Latest answer posted February 2, 2014 1:53 am UTC

2 educator answers

Economics

Inflation is related to the economic stability and strength of a specific country. As the economy changes in a nation, the currency changes in value or buying power. However, relative to other...

Latest answer posted June 3, 2019 1:19 pm UTC

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Economics

The fundamental differences between an oligopoly and monopolistic competition can be broken down into three categories. An oligopoly is made up of a small number of dominating firms, while...

Latest answer posted April 4, 2017 8:42 am UTC

2 educator answers

Economics

While it is true that there is a large demand for water, there is also a large supply of it. Potable water is still in abundance on Earth. While water imported from exotic locales can be a little...

Latest answer posted October 14, 2018 5:49 pm UTC

4 educator answers

Economics

Economic growth is almost always desirable as being in the best interest of the most people. Economic stagnation or negative growth – in other words, the economy actually contracts – create...

Latest answer posted November 6, 2013 2:49 pm UTC

1 educator answer

Economics

The demand for one country’s currency will have an impact on the other country’s currency, assuming normal economic circumstances. Thus, if the American demand for British pounds increases, the...

Latest answer posted May 1, 2016 10:01 pm UTC

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Economics

The consequence of increasing the money supply is generally an increase in economic activity. This effect can be muted if banks refuse to lend and if firms are reluctant to borrow. However, an...

Latest answer posted April 15, 2013 5:14 pm UTC

1 educator answer

Economics

A required reserve ratio for a bank is the percentage of outstanding loans, made by the bank to borrowers, that must be held in the reserves of the bank in the form of cash or readily liquid...

Latest answer posted March 5, 2019 9:24 pm UTC

2 educator answers

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