Learn about utility theory. Study utility in economics, examine utility economics examples, and discover how utility affects the decisions...
They believe the government should take a more active role in protecting the common welfare. This role means owning some factors of production. Most socialist governments own the nation's energy, health care, and education services. Even more critical are communists. They believe the people, as...
A market system is a network of entities that come together to trade goods and services. What Is a Market in Economics? A market in economics can be a physical location or an intangible space where trade occurs. Markets are fundamentally formed around individuals' self-interests. These...
In this case, capital refers to capital goods and should not be mixed with financial capital. In Marxian economics, capital goods refer to the means of production, which are used by individuals and organizations for the production of goods and services. In other words, capital goods are man-...
Interest computed on the sum of an original principal and accrued interest. Here’s a simple example that we’ll build on for the rest of the article. If an investor puts $1,000 into an investment that earns 5% annually, that investment will pay $50 in year 1. ...
Start writing your essay: Fill in each section of your outline, adding details, supporting arguments, and evidence to your points. Write one section at a time. When it’s hard to start writing, it’s okay to write an essay’s body paragraphs first and then return to the introductory para...
Elasticity is an important economic measure, particularly for the sellers of goods or services, because it indicates how much of a good or service buyers consume when the price changes. When a product is elastic, a change in price quickly results in a change in thequantity demanded. When a ...
Two Main Types of Duopoly The two main types of duopoly are theCournotduopoly and Bertrand duopoly. The Cournot duopoly model states that the quantity of goods or services produced structures the competition between companies in an industry. According to the model, the two companies decide collabora...
Self-interest refers to actions that elicit personal benefit.Adam Smith, the father of modern economics, explains that the best economic benefit for all can usually be accomplished when individuals act in their own self-interest. His explanation of theInvisible Handreveals that when dozens or even ...
One of the core characteristics of Keynesian economics or demand-side economics is the emphasis on aggregate demand. Aggregate demand is composed of four elements: consumption of goods and services; investment by industry in capital goods; government spending on public goods and services; and net ex...