Economics Questions and Answers

Economics

The Hecksher-Ohlin model explains mathematically how a country should operate and trade in a world where resources are imbalanced. It suggests that countries export what they can produce most...

Latest answer posted March 28, 2020 9:02 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

2 educator answers

Economics

Because the economy is such a complex thing, it is hard to know exactly why the business cycle happens. There are many factors that are thought to cause these fluctuations. Two of the most...

Latest answer posted March 27, 2012 10:54 pm UTC

1 educator answer

Economics

First of all, we are not able to know what examples are given in the chapter you are referring to and so some of this answer may duplicate what you already know. Technology is a major cause of...

Latest answer posted November 13, 2012 7:19 pm UTC

1 educator answer

Economics

From the beginning of the Industrial Revolution, especially here in America, the disadvantages of a capitalist society have been readily apparent: workers without safety precautions; working in...

Latest answer posted July 31, 2011 6:22 am UTC

6 educator answers

Economics

The value of money is derived from a variety of sources. Essentially, the currency has whatever value people are willing to take it for. If someone is willing to sell a hamburger for one dollar,...

Latest answer posted April 26, 2019 1:42 pm UTC

2 educator answers

Economics

There are many ways in which this is true. First, gross domestic product (GDP) on its own does not measure how rich a country is on a per capita basis. For this reason, for example, GDP is not a...

Latest answer posted January 23, 2013 4:36 pm UTC

1 educator answer

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

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

2 educator answers

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

2 educator answers

Economics

If you are the manager of this company, you cannot know whether to shut down simply based on the factors that you ask about in this question. The total revenue and total costs are not the numbers...

Latest answer posted January 21, 2013 5:03 pm UTC

1 educator answer

Economics

GDP is the main measure of economic growth. If the GDP is steadily increasing, that means the economy is growing. However, that’s easier said than done. In economics, there are two types of GDP:...

Latest answer posted January 29, 2021 4:37 pm UTC

1 educator answer

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

Since you have posted this in the Economics section, I will talk about this with regard to averages that have to do with economics. Averages can, in general, be misleading because they can be...

Latest answer posted March 20, 2013 9:06 pm UTC

1 educator answer

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

3 educator answers

Economics

The three factors most likely to increase demand are consumer income, consumer tastes, and the number of consumers. As there come to be more people in the world, there are more potential consumers...

Latest answer posted October 24, 2012 2:25 pm UTC

1 educator answer

Economics

Economists who accept the quantity theory of money are usually called monetarists. Monetarists believe that there is a direct proportional relationship between prices and the amount of money in...

Latest answer posted December 30, 2018 2:55 pm UTC

2 educator answers

Economics

Let's take a look the effect of taxes on buyers and sellers. Typically, a tax is imposed on either the buyer or the seller, depending on the country. For example, the United States usually imposes...

Latest answer posted May 24, 2020 11:33 pm UTC

4 educator answers

Economics

A trade imbalance exists when a nation's exports are much greater or much lower in value than its imports. Typically, we speak of the trade imbalance between two countries, when one country exports...

Latest answer posted August 12, 2011 11:34 pm UTC

1 educator answer

Economics

First of all, it is impossible to have stagflation without a shift of the short run aggregate supply (SRAS) curve to the left. Stagflation consists of higher inflation along with higher...

Latest answer posted September 16, 2015 3:37 pm UTC

1 educator answer

Economics

A sound financial system is essential to promote economic growth because financial systems allow for the lending and borrowing that promote growth. Without a sound financial system, two negative...

Latest answer posted June 25, 2012 9:00 pm UTC

1 educator answer

Economics

Classical economics has its origins in eighteenth-century Europe, when many theorists—most famously Adam Smith—took aim at many of the core assumptions of the state-centered theory of economics...

Latest answer posted September 10, 2020 2:23 pm UTC

1 educator answer

Economics

One of the positive externalities associated with constructing new roads is an increase in the efficiency with which vehicles can travel. All vehicles have an ideal speed at which their engines run...

Latest answer posted May 8, 2011 3:05 pm UTC

2 educator answers

Economics

In the long run, an economy that is experiencing an expansionary gap (also called an inflationary gap) adjusts automatically through the price mechanism. When an economy is experiencing an...

Latest answer posted November 26, 2012 4:36 pm UTC

1 educator answer

Economics

Classical economists assumed that wages and prices in an economy will be very flexible. This is one of the major pieces of the foundation of their whole model of a self-correcting economy....

Latest answer posted November 27, 2012 9:37 pm UTC

1 educator answer

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

3 educator answers

Economics

Since the Great Depression, the US government has operated on Keynesian economics philosophy more than classic free market principles. A free market implies that businesses set their own rules and...

Latest answer posted October 7, 2018 7:56 pm UTC

3 educator answers

Economics

Macroeconomics is the “forest” because it is concerned with the big picture. Microeconomics is “in the trees” because it is concerned with the details that make up the “forest.” Microeconomics is...

Latest answer posted November 5, 2013 2:55 am UTC

1 educator answer

Economics

By definition, economic resources are limited. We never have enough land, labor, capital, or entrepreneurship to use on all of the things that we would like to produce and consume. This is the...

Latest answer posted August 26, 2013 12:56 am UTC

1 educator answer

Economics

One method of growing a factor of production would be importing workers. This can be done by providing visas for unskilled laborers to come take unfilled jobs or it can be by providing financial...

Latest answer posted October 21, 2019 11:05 pm UTC

4 educator answers

Economics

The marginal cost curve is U-shaped because of the relationship between short-run marginal production and cost and long-run marginal production and cost. An inverse correlation exists between...

Latest answer posted January 1, 2019 12:32 am UTC

2 educator answers

Economics

Not well. Unlike most other countries in Asia, Malaysia has for a long time been a net oil exporter. Actually, it very recently became a net oil importer like most countries, and if that persists...

Latest answer posted June 10, 2016 9:05 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

If there is a shift in the demand curve for DVDs, the curve can shift either to the right or to the left. The direction in which it shifts will be determined by the sort of change that occurs in...

Latest answer posted January 16, 2013 2:35 pm UTC

1 educator answer

Economics

The question you are asking is an example of price elasticity of demand: how the quantity demanded of a product or service rises or falls in response to a change in the price of that product or...

Latest answer posted February 5, 2020 3:21 am UTC

1 educator answer

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

Equilibrium is conditions of quantity and price that make up the natural resting state of the market. The market seeks equilibrium because it is the solution to the interaction of market supply and...

Latest answer posted June 20, 2019 7:49 pm UTC

4 educator answers

Economics

The “exploitation of labor” refers to the class relation between capitalists and workers in Marxist political economy. For Marx, under capitalism people are divided into two classes: the...

Latest answer posted September 5, 2018 12:18 pm UTC

2 educator answers

Economics

This is definitely a personal opinion question, so feel free to state your opinion and defend it. Personally, I do not think that the government should increase or decrease tax rates on everyone in...

Latest answer posted December 3, 2018 11:36 pm UTC

3 educator answers

Economics

There are two opposing terms with currency: floating and fixing. To fix a currency, you refuse to let its value fluctuate with the market (the exchange rate would remain fixed—for example, 2...

Latest answer posted May 23, 2019 8:14 pm UTC

2 educator answers

Economics

Such a motel might (and should) shut down in the long run because of the opportunity cost of keeping it open. The opportunity cost of running the motel is the value of the use that could be made...

Latest answer posted April 12, 2012 12:13 am UTC

1 educator answer

Economics

Product markets are actually markets in which certain types of products are easily marketed and in demand. Let's take a couple of examples of product markets in a good and bad economy. In many...

Latest answer posted February 25, 2012 5:07 pm UTC

2 educator answers

Economics

According to the Constitution, the government is not legally required to do anything in an economic crisis; however, since the public associates economic prosperity with elected officials, these...

Latest answer posted March 11, 2020 2:17 am UTC

1 educator answer

Economics

“Providing a stable of institutions and rules” (#1 on the list in the question posed) is the basic economic function of government being performed when the government makes insider trading...

Latest answer posted July 20, 2015 4:00 pm UTC

2 educator answers

Economics

The difference between an economic profit and an accounting profit is that one takes opportunity cost into account while the other does not. In perfect competition, economic profit is not possible...

Latest answer posted November 14, 2013 10:00 pm UTC

1 educator answer

Economics

A price ceiling for physicians' services will have the effect of causing a shortage in the market for those services. The quantity demanded will be lower than the quantity supplied and there will,...

Latest answer posted November 23, 2011 1:46 am UTC

1 educator answer

Economics

Gross domestic product (GDP) describes an economy's total demand. Government spending directly correlates with the direction of GDP demand. When government spending increases, real GDP demand...

Latest answer posted October 27, 2018 8:29 pm UTC

4 educator answers

Economics

There are at least a couple of ways that you could understand this question. First, it might be asking how the government directly manipulates GDP. In other words, this might be asking how...

Latest answer posted May 14, 2015 12:43 am UTC

1 educator answer

Economics

While urban development projects do harm some people by doing things like causing the destruction of their homes, they can, ideally, be of benefit to many more people. Let us look at some of the...

Latest answer posted November 7, 2013 4:14 pm UTC

1 educator answer

Economics

If a firm charges a price that is below the equilibrium price for its product, shortages of the good in question will arise. In order to understand this, we must understand the laws of supply and...

Latest answer posted March 20, 2013 3:27 am UTC

1 educator answer

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