Month: February 2021

MONEY IN MODERN ECONOMIES Money plays a crucial role in modern economies.  Without money, trade would be based on barter.  In a barter economy, trade requires a double-coincidence of wants – if you have eggs but want cheese you must Read More …

. GOVERNMENT POLICIES AND OBJECTIVES Governments play a major role in all modern economies.  Public procurements – government expenditure on defence, education, health, transport, etc. – represent a major claim on the economic resources of society.  Government expenditure is therefore Read More …

KEYNES AND AGGREGATE DEMAND In the previous chapter, we were concerned with the measurement of economic activity.  In this and subsequent chapters, we will be developing a system of macro-economic analysis to help us investigate why the level of economic Read More …

FROM MICRO TO MACRO ECONOMICS The microeconomic analysis of previous units was concerned with particular markets and the strategies of economic agents in these markets.  The focus was on the behaviour of the firm, the consumer, the worker, the determination Read More …

MARKET STRUCTURES AND ECONOMIC WELFARE In Study Unit 7 we examined the main forms of market structure – perfect competition, monopolistic competition, oligopoly and monopoly.  At the start of our examination we noted that it has long been a common Read More …

MEANING AND IMPORTANCE OF COMPETITION ‘Competition’ is one of those simple words which are common in everyday speech and which we all assume we understand but which, when we really try and explain, start to present difficult problems. Ask yourself Read More …

NATURE OF MARKETS In economics, a market is an area within which the forces of demand and supply for a particular “economic good” can communicate and interact, so that the good can be transferred from suppliers to buyers. This definition Read More …

THE NATURE OF PROFIT The simplest definition of profit is that it is the excess of revenue over cost.  This is a little deceptive because it is not always easy, in practice, to decide what is revenue and what is Read More …

FACTOR AND INPUT COSTS Production Factors and Costs In Study Unit 1 we examined how the factors of production – land, labour and capital – contributed to total production.  We also saw that some factors could be regarded as fixed Read More …

INFLUENCES ON DEMAND Flow of Demand The demand curve which we identified in the previous study unit illustrates the quantities of a product that a group of consumers are prepared to buy at a range of possible prices.  We must Read More …