Economies of scale in economics
Economies of scale in economics It is a type of advantage, in terms of production cost, given industry or business achieve when they substantially increase the volume of production of…
Economic growth and development
The basic difference between economic growth and economic development is that growth speaks quantitative numbers, while economic development is all about the qualitative changes in the structure of economy and…
Elasticity and inelasticity in economics
Elasticity and inelasticity of demand and supply is a subject matter of micro economics. If the demanded quantity changes in response to the changes in other variables like taxes or…
Government improves market outcomes
Not all the time, market is left on the vagaries of sentiments of surplus seeking consumers and producers. If the volatility breaks the tolerance range, government has to step in…
Marginal utility and total utility
The capacity of a commodity to satisfy human want is known as the utility of the given commodity. Utility plays important role in understanding the behaviour of consumers and enable…
Rational People Think at the Margin
Someone well said that decisions in life are hardly black and white. It means that person, a rational being, know how to make best out of available opportunities while making…
People respond to incentives
In market, prices of commodity consumers want determine the demand of given commodity. Because, more the prices, lesser the demand due to no willingness or ability to pay the rising…
People face trade offs
Nothing is infinite on this planet. Hence, scarcity, choices, and bargaining are permanent in our day-to-day economic activities. Practically, no one can produce everything he needs, nor does he consume…
Importance of comparative advantage
Comparative advantage is a fundamental concept in microeconomics. It explains how individuals, businesses, and nations can benefit from specializing in the production of goods and services in which they have…
Explaining the concept opportunity cost
How are opportunity cost and comparative advantage interlinked? What is mean by opportunity cost? How does opportunity cost influence decisions? Why are they important for free trade? If you think…