Month: October 2020

Medium of exchange: Money facilitates the exchange of goods and services in the economy. Workers accept money for their wages because they know that money can be exchanged for all the different things they will need. Use of money as Read More …

The ability and freedom of the consumer to determine the fundamental resource allocation decisions is limited by the following factors: Nature of the economic system – In general, the consumer is more sovereign in a free market oriented system where Read More …

Consumer Sovereignty is the willingness, ability and freedom of the consumer to largely influence the fundamental economic decisions of resource allocation. The consumer‟s willingness and ability to spend on goods and services is an indication to producers (firms) of what, Read More …

Ceteris Paribus is a Latin expression which means all other things remaining constant. It is an essential component of a scientific method. If, for example, we wish to examine the effect of price on demand we do not simultaneously change Read More …

In society, people tend to vary in their ideas and views. They are influenced differently by different events in different situations. Similarly, such events may or may not happen as expected and their explanations may or may not be by Read More …

Production possibility curve (PPC) is the locus of combinations of two commodities whose production fully and efficiently utilizes the available resources and technology in a given period of time. It shows the maximum output a county can produce with its Read More …

The opportunity cost of an action is the value of the benefit expected from the next best foregone alternative. It is a derivative concept which arises due to the scarcity of resources (for production) or goods and services (for consumption) Read More …

Scarcity being the central economic problem is defined as the inadequacy/ insufficiency/ inability of (economic) resources or goods and services available to fully satisfy unlimited wants. Human wants are people’s desires for goods and services (backed by the ability to Read More …

a) Specialization The economies of mass production upon which modern standards of living are based would not be possible if production took place in self-sufficient farm households or regions. As such, many societies and individuals specialize or concentrate on only Read More …

There are no economies in the world which are entirely „market‟ or planned, all will contain elements of both systems. The degree of mix in any one economy is the result of a complex interaction of cultural, historic and political Read More …