An economy in which all economic agents treat prices as given when making economic choices. This article delves into the historical context, key concepts, mathematical models, and significance of a competitive economy.
Economic Models are theoretical constructs used to analyze the behavior of economic agents through quantitative and logical methods. These models are composed of various variables, assumptions, and constraints, and are simplified representations of the real world.
A comprehensive examination of efficient allocation, including historical context, key concepts, mathematical models, and practical applications.
Fairness in economics refers to the perception that an allocation treats all economic agents equitably. Using the no-envy criterion, fairness is evaluated by ensuring no agent prefers another's allocation over their own.
Incentives are rewards or penalties designed to influence economic agents' behaviors to achieve specific results. They include pay variations, working conditions adjustments, promotion prospects, and reputation impacts, influencing actual results or managerial perceptions.
Incomplete Information refers to situations where economic agents do not have all relevant information, distinguishing between public and private information.
Risk sharing involves the distribution of risk among different economic agents to manage and mitigate potential losses. This entry explores the principles, applications, and implications of risk sharing in finance, economics, and government.
Explore the concept of Strategic Interaction, where the outcome for an economic agent is influenced by the choices of others, analyzed using game theory.
The concept of tax shifting involves transferring the burden of a tax from one economic agent to another, influenced by the elasticity of demand and supply. It explains how taxes affect prices and who ultimately bears the cost.
