Economics Questions and Answers

Economics

This is not true in modern economies. Governments do very much serve as actors in the economy. The most important way that the government does this in the United States is through providing many...

Latest answer posted September 13, 2012 1:05 am UTC

1 educator answer

Economics

The opportunity costs of buying a new car and going to college can be compared in terms of the actual money required for both expenditures, but also in regard to the significant differences between...

Latest answer posted June 13, 2020 5:33 am UTC

1 educator answer

Economics

First, we have to remember that externalities come in two basic types. There are both positive and negative externalities. Of course, the government will respond differently to the two. With...

Latest answer posted April 24, 2013 3:12 am UTC

1 educator answer

Economics

If a market begins as a perfectly competitive market and then becomes a monopoly, the quantity that is made of the product will drop and the price for it will increase. The reason for this is that...

Latest answer posted April 13, 2012 1:49 am UTC

1 educator answer

Economics

The first answer here is correct in many ways. Economists do certainly argue that, in the long term, automation is good for an economy. However, this does not mean that automation is good right...

Latest answer posted November 16, 2012 4:57 pm UTC

2 educator answers

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

No theory about human behavior is ever likely to accurately describe all people. That, however, does not mean that the theory will be useless. To think about this, let us look at the theory that...

Latest answer posted August 20, 2013 3:32 am UTC

1 educator answer

Economics

A “credit crunch” reduces aggregate demand (AD). When it does this, it will (all other things being equal) reduce gross domestic product (GDP) and increase unemployment. When banks will not lend...

Latest answer posted August 22, 2013 8:35 pm UTC

1 educator answer

Economics

The answer to this will depend to a great extent on the size of the country and the degree to which the trafficking dominates its economy. Let us look at two examples. In Mexico, there is a great...

Latest answer posted May 1, 2012 1:34 pm UTC

1 educator answer

Economics

In any economy, a product's price is what one person is willing to pay for it and another is willing to sell it for. The equilibrium is the golden market value, where supply equals demand in a...

Latest answer posted February 27, 2012 10:11 am UTC

8 educator answers

Economics

Adam Smith is considered to be the father of economics. This is not because Adam Smith was the first person to consider many of the ideas he is credited with, but instead because he was the first...

Latest answer posted July 24, 2018 1:00 am UTC

2 educator answers

Economics

Household production involves the production of goods and services by members of a household for their own use and consumption. To produce these goods and services, they use their own capital and...

Latest answer posted March 29, 2017 1:19 pm UTC

1 educator answer

Economics

Perhaps a better question is what the role of government in the economy *should* be. After all, there are governments around the world and across time that have taken almost every conceivable role...

Latest answer posted January 30, 2012 11:58 pm UTC

1 educator answer

Economics

The easiest way to think of a balanced budget is to consider your budget. If you are working and earning a weekly salary, as long as you don't spend more than you make, your budget is balanced....

Latest answer posted March 22, 2019 6:34 pm UTC

2 educator answers

Economics

Brazil is going through a rough patch, but they'll be okay in the long run. Already, Brazil is an upper-middle income country with a GDP over $2 trillion. Per capita their GDP is about $15,000,...

Latest answer posted May 19, 2016 8:00 pm UTC

2 educator answers

Economics

There is no way to know whether mashed potatoes are an inferior good unless we have access to information about the quantity demanded of mashed potatoes and how it correlates to consumer incomes....

Latest answer posted October 16, 2012 6:37 pm UTC

1 educator answer

Economics

When governments practice protectionism (restricting or banning imports), they are typically trying to improve their own domestic economies. Many governments feel that imports compete unfairly with...

Latest answer posted May 26, 2011 10:06 pm UTC

1 educator answer

Economics

There are various reasons why inflation may occur. One factor would be an increase in the demand for products. If people have more money or more access to money, they will generally spend it....

Latest answer posted March 30, 2018 4:21 pm UTC

2 educator answers

Economics

The law of demand states that, all other things being equal, there will be an inverse relationship between the price of a good or service and the quantity of that product that people are willing...

Latest answer posted October 1, 2016 3:07 pm UTC

1 educator answer

Economics

During wartime, the major driver of inflation is aggregate demand. We must remember that aggregate demand does not simply include civilian spending. Instead, it covers government spending as...

Latest answer posted November 9, 2012 9:30 pm UTC

1 educator answer

Economics

The basic difference between a move along a demand curve and a change in the curve is that the former is caused by a change in price while the latter is not. A move along the curve results in a...

Latest answer posted January 15, 2013 1:48 am UTC

1 educator answer

Economics

In order to determine whether pebbles from a beach will make a good form of money, we have to look at the properties that an object must have in order to be useful as money. There are generally...

Latest answer posted September 29, 2013 7:24 pm UTC

1 educator answer

Economics

Canadian GDP (Gross Domestic Product) is the financial value of all the finished goods and services produced within Canada in a particular period of time, typically a year. GDP includes all of...

Latest answer posted June 29, 2015 4:19 pm UTC

2 educator answers

Economics

The reason for this is that inflation can feed on itself, creating more and more inflation. Uncontrolled inflation can destroy an economy. If there is too much inflation, lenders will not want to...

Latest answer posted April 24, 2012 6:40 pm UTC

1 educator answer

Economics

Marginal revenue can be defined as the increase in revenue from one additional item sold minus total price reductions on all other units. In this case, that would be $31 minus $14 (one dollar price...

Latest answer posted January 2, 2019 2:21 am UTC

2 educator answers

Economics

Of the options that you have given here, only option 1 and part of option 3 will decrease the demand for portable music players. The other options will either increase demand for the players or...

Latest answer posted February 3, 2013 4:39 am UTC

1 educator answer

Economics

Trade-off and opportunity cost are both terms in economics that refer to choosing one option over other options based on the value of the various options. When we have to make a selection among...

Latest answer posted September 16, 2020 6:31 pm UTC

1 educator answer

Economics

Population growth carries both costs and benefits, but based on decades of research and debate, the consensus among economists is that a moderate level of population growth is better than either a...

Latest answer posted May 19, 2016 8:52 pm UTC

2 educator answers

Economics

Labor unions came into existence for entirely legitimate reasons. The abuse of workers early in the 20th Century, with abysmal and often physically dangerous working conditions, longer than humane...

Latest answer posted June 9, 2013 5:29 pm UTC

2 educator answers

Economics

When a nation's currency rises in value, it is generally good for the country's consumers but bad for its industries. When a nation's currency appreciates (let's use the US as an example), it...

Latest answer posted January 11, 2012 2:10 pm UTC

1 educator answer

Economics

To answer this, you have to remember the following definitions: Accounting profit is the difference between total revenue and total explicit cost. Economic profit is the difference between total...

Latest answer posted October 26, 2011 10:10 am UTC

1 educator answer

Economics

Within a system of mercantilism, the banks and large businesses are the primary forces behind public policy. While this focus on financial profits can create large economic growth for a nation as a...

Latest answer posted February 19, 2021 6:54 pm UTC

1 educator answer

Economics

Yes, this statement is accurate. Capital is one of the factors of production. It is those things that are made by people as a means of making other things. So these are things like factories that...

Latest answer posted June 22, 2012 2:10 pm UTC

1 educator answer

Economics

In a competitive market prices of products are not regulated by government intervention in any form; instead the market forces of demand and supply are allowed to determine the price of any...

Latest answer posted February 1, 2012 12:36 pm UTC

1 educator answer

Economics

Many economists, including Nobel Prize winner Paul Krugman, have asserted that financial deregulation, begun under the Ronald Reagan administration in the 1980s, had the largest impact on the...

Latest answer posted July 16, 2018 1:10 am UTC

2 educator answers

Economics

There are a number of points that must be made here. First, there are many people who would dispute the idea that outsourcing is a “problem.” To many people, outsourcing is an important business...

Latest answer posted January 28, 2013 11:05 pm UTC

1 educator answer

Economics

If sustainable peace is reached around the world and military spending by the United States government is reduced, then the expenditures made by the United States government would decline overall....

Latest answer posted September 13, 2020 5:07 am UTC

1 educator answer

Economics

Really, the whole US government is responsible in some way for maintaining the purchasing power of the dollar. Perhaps the most responsible entity is the Federal Reserve, which is the central bank...

Latest answer posted July 27, 2011 1:43 pm UTC

1 educator answer

Economics

When using the basic circular flow model, it is possible to add nuance by adding injections to the model and leakages from it. The leakages and injections should cancel one another out, producing...

Latest answer posted October 2, 2012 6:33 pm UTC

1 educator answer

Economics

In a sense, the market structure does not affect output decisions. All firms should determine the quantity of output in the same way. In all market structures, the best quantity of output is the...

Latest answer posted April 6, 2012 2:34 am UTC

1 educator answer

Economics

There are always limits. You cannot perpetually grow. Eventually, you will run out of resources. When we ran out of capital, we began to rely more on other countries. Look where that got us.

Latest answer posted September 26, 2011 3:22 am UTC

2 educator answers

Economics

The Circular-Flow Model depicts the way that money and products flow within the economy, illuminating the interdependent relationship between the different facets of the economy. The model includes...

Latest answer posted October 24, 2018 1:58 pm UTC

2 educator answers

Economics

The only one of these choices that could be correct is the first one. The others show an improper connection between price and quantity demanded. The one caveat is that the phrase in the first...

Latest answer posted March 29, 2012 6:30 am UTC

1 educator answer

Economics

Income multiplication is very important to the market economy. When one receives income, one can spend it on many goods and services. This provides jobs for the people who created those goods and...

Latest answer posted March 20, 2017 1:08 pm UTC

2 educator answers

Economics

Supply and demand work together to determine the price of a good or service, but they are not the same thing. Supply refers to how much of a product producers are willing to produce at a given sale...

Latest answer posted October 24, 2012 3:13 pm UTC

1 educator answer

Economics

In macroeconomics, aggregate demand (AD) is defined as the total demand for goods and services within a particular market, in a particular time. It is the total amount of goods and services that...

Latest answer posted December 29, 2018 8:20 am UTC

2 educator answers

Economics

What a productions possibility curve is supposed to show you is A) that there are tradeoffs and opportunity costs because you have to make less of one thing to make more of another, B) that...

Latest answer posted August 14, 2015 5:46 pm UTC

1 educator answer

Economics

The price elasticity of demand is a measure of the percentage change in the quantity of a product demanded by customers for a percentage change in the price of the product. Demand and price have an...

Latest answer posted November 22, 2011 12:34 pm UTC

1 educator answer

Economics

The question asks about the effect of a reduction in per unit tax on the market supply of a good. We will assume that this refers to a tax placed on the item at point of sale and assessed by the...

Latest answer posted July 25, 2016 7:01 am UTC

1 educator answer

Economics

A country's Gross Domestic Product, commonly referred to as GDP, is a calculation which measures the values of all goods and services produced during a specified period, generally a year. This...

Latest answer posted July 16, 2013 6:19 pm UTC

1 educator answer

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