An in-depth analysis of Marginal Benefit, encompassing historical context, key events, detailed explanations, mathematical models, practical examples, and much more.
An in-depth exploration of the equality of marginal benefit and marginal cost as a necessary condition for optimal economic decisions.
Marginal External Cost (MEC) refers to the additional costs borne by the public that arise from the production of goods or services, which are not reflected in the producer's costs.
Explore the concept of Marginal Private Benefit, its historical context, key events, detailed explanations, formulas, and real-world applications.
The Marginal Product of Capital (MPK) refers to the additional output produced as a result of investing one more unit of capital. It is a fundamental concept in economics, highlighting the incremental increase in production capacity.
A comprehensive exploration of the Marginal Rate of Technical Substitution, a critical concept in economics and production theory, explaining its meaning, historical context, types, mathematical formulas, applications, and more.
Explore the concept of Marginal Utility of Income, its implications in economics, its mathematical models, historical context, and practical applications. Understand its distinction from wealth, and how it affects risk-averse, risk-neutral, and risk-loving individuals.
An in-depth look at the Marginal Utility of Money, exploring its historical context, types, key concepts, mathematical models, importance, applicability, and related terms.
An in-depth exploration of market equilibrium, where supply and demand are balanced at the prevailing price, including historical context, key events, models, importance, applicability, and related concepts.
A criterion in international economics establishing that a currency depreciation will positively affect a country's trade balance if the sum of the price elasticities of exports and imports exceeds one.
The Marshall-Lerner condition is a critical economic principle stating that a devaluation will improve a country's balance of trade if the sum of the price elasticities of demand for exports and imports (in absolute value) is greater than 1.
Mercantilism is an economic theory from the 16th to 18th centuries focusing on the accumulation of capital and wealth through a balance of payments surpluses and protectionist policies.
Merit goods are goods or services that provide benefits to society greater than those reflected in consumers' preferences. This entry explores the concept, historical context, types, key events, mathematical models, applicability, examples, and more.
Monetarism is an economic theory that emphasizes the critical role of government in regulating the amount of money in circulation to control inflation and stabilize the economy.
Monetarism is an economic theory emphasizing the role of the money supply in determining economic stability and growth. It argues that a steady, controlled increase in money supply aligns with the natural growth of aggregate supply and inflation targets.
An in-depth exploration of the concepts of monetary neutrality and superneutrality, their historical context, economic significance, and the key differences between them.
The Multiplier Effect describes the proportional increase in final income that occurs due to an initial spending injection, leading to a greater overall economic output.
A comprehensive look at the Multiplier-Accelerator Model which explains economic fluctuations through the interaction of the multiplier effect and the accelerator principle.
The unemployment rate at which inflation does not accelerate.
A detailed exploration of the concept of necessity in economics, including its definition, historical context, types, key events, mathematical formulas, importance, applicability, examples, and related terms.
An approach in economics that combines neoclassical microeconomics and Keynesian macroeconomics to offer a comprehensive framework for understanding and guiding economic policy.
An exploration of New Classical Economics, focusing on rational expectations, market-clearing assumptions, utility and profit maximization, implications for government policy, and its broader economic impacts.
New Classical Economists emphasize rational expectations and market-clearing models, providing a critique and an extension to monetarist views which focus more on money supply control.
An in-depth exploration of the concept of numeraire, its historical context, types, key events, mathematical models, importance, applicability, and examples, enriched with diagrams, related terms, interesting facts, FAQs, references, and more.
An Optimum Tariff is designed to maximize a country's welfare by balancing the improvement in the terms of trade with the restriction of trade quantities.
Output refers to the result of an economic process, which uses inputs to produce a product or service available for sale or use elsewhere. This entry delves into its historical context, types, key events, explanations, formulas, and more.
An analysis of the economic phenomenon where variables temporarily exceed their long-run equilibrium in response to shocks.
An exploration of the paradox of thrift, which suggests that increased individual savings may lead to decreased overall savings and investment in a depressed economy.
Detailed explanation of Pareto Efficiency, including its definition, applications, and historical context in economics.
An in-depth exploration of Pareto Efficiency, its historical context, applications in economics, mathematical modeling, and importance in various fields.
An in-depth look into pecuniary externalities, their mechanisms, historical context, and implications in economic theory.
A market in which the conditions for perfect competition are satisfied and a homogeneous commodity is traded.
The Permanent Income Hypothesis posits that consumption is determined by an individual's long-term average income rather than current income. This concept has significant implications for understanding economic behavior and formulating fiscal policies.
Physical capital maintenance is a key concept in the field of accounting and economics, focusing on the preservation of an entity's physical capital over time. This concept ensures that a company's capacity to produce goods and services remains intact, accounting for wear and tear as well as depreciation.
The theory that some economic fluctuations are due to governments seeking political advantage by expanding the economy in advance of elections. Governments may also choose to make painful reforms immediately after elections, to give the electorate a chance to forget the pain and start reaping the benefits in time for the next election.
An in-depth exploration of Positive Accounting Theory (PAT), which describes and predicts the actual accounting practices without prescribing what should be done.
Positive economics focuses on describing and explaining economic phenomena, making predictions without value judgements. It contrasts with normative economics, which prescribes policies based on subjective criteria.
Post-Fordism refers to the evolution of industrial practices beyond the principles of Fordism, characterized by greater flexibility, customization, and the use of advanced technology.
An in-depth exploration of the poverty trap phenomenon, encompassing individual and national perspectives, historical context, economic implications, and potential solutions.
An in-depth exploration of the precautionary motive to hold money as a buffer against unforeseen financial needs, its historical context, types, key events, formulas, and more.
An in-depth exploration of preference revelation, mechanisms for true preference disclosure, and its significance in economics, finance, and public policy.
A comprehensive overview of the economic concept of a price-taker, including historical context, types, key events, detailed explanations, mathematical models, importance, applicability, and related terms.
An in-depth look at private property, its historical context, legal framework, economic importance, and related concepts.
A comprehensive article on Production Set, exploring its definition, historical context, key concepts, mathematical models, importance, and applications in economics and business.
A detailed exploration of the concept of profit maximization, its historical context, importance, mathematical models, applications, examples, and related terms.
The Profit Motive is the desire for gain as a motive in economic activity. While it implies the goal of maximizing profit, it can also suggest selfishness. Adam Smith highlighted its role in achieving Pareto efficiency through rational choices and the price mechanism.
Public goods are characterized by their non-excludable and non-rivalrous nature, leading to unique economic challenges and implications. This comprehensive article delves into their historical context, types, key events, and much more.
Pump priming is a theory that suggests the government can instigate a permanent recovery from economic downturns through temporary increases in spending, thereby raising incomes and encouraging investment.
A detailed exploration of the Quantity Equation (MV = PT), its historical context, applications, and implications in economics.
The Quantity Theory of Money posits that the price level is proportional to the quantity of money in circulation. This concept is articulated through the equation MV = PT, which considers factors like money supply, velocity, price level, and transaction volume.
The Ratchet Effect refers to an irreversible change to an economic variable, such as prices or wages, which tends to remain elevated even after the original economic pressures subside, potentially fueling inflation.
The Ratchet Effect refers to the tendency for a variable to be influenced by its own highest previous value, creating a one-way upward stickiness.
An exploration of the theory that savings behavior is influenced by a person's relative income position within their community or region.
A detailed exploration of the concept of a Representative Firm, including its historical context, applications, and significance in economic theory.
An in-depth exploration of reputational policy, its significance, historical context, mathematical models, and real-world applications.
An in-depth exploration of Ricardian Equivalence, its history, applications, and implications in economic theory.
Understanding how combining risky projects with non-perfectly correlated returns results in less dispersion in expected outcomes. Applications in insurance, investments, and organizational strategy.
A comprehensive examination of rivalrous goods, including historical context, types, key events, detailed explanations, and more.
A rules-based policy is a policy regime formulated as a set of certain rules that remain constant over time or do not respond to changes in the economic environment. An example includes mandating a constant growth of the money supply.
Satisficing is a decision-making strategy that prioritizes reaching an adequate outcome rather than the optimal one. This approach is often justified by the high costs of information collection and processing associated with optimization.
The concept of second-best pertains to situations where policy-makers encounter constraints beyond technology and endowments, preventing the achievement of a first-best outcome. This article explores the Lipsey-Lancaster theory of second-best and its implications for economic policy.
A segmented market is characterized by restricted contact between different customers or suppliers, enabling price discrimination and different levels of service. This concept also applies to labor markets and is subject to anti-discrimination laws in many countries.
Self-fulfilling expectations are a fascinating economic phenomenon where people's beliefs about the future cause actions that bring those beliefs to fruition, particularly impacting market prices and behaviors.
An in-depth exploration of self-interest, including its definition, types, implications, examples, historical context, and related terms.
An in-depth look at shadow prices in linear programming, including historical context, types, key events, explanations, formulas, diagrams, applicability, and related terms.
A comprehensive explanation of the short-run cost curve, its types, components, key models, and its relevance in economics and business.
The Slutsky Equation decomposes the effect of a price change into substitution and income effects, providing critical insights into consumer behavior in economics.
An in-depth exploration of social cost, including its definition, significance, types, key events, detailed explanations, and examples. A comprehensive guide to understanding the complete cost of any activity, including private and external costs.
A comprehensive analysis of the Social Welfare Function, its historical context, types, key concepts, and implications in economics.
An in-depth exploration of Soft Budget Constraint, a fiscal phenomenon where public bodies or state-owned entities operate with the expectation that overspending will be covered by external support, often leading to inefficiencies and financial laxity.
Understanding the concept of Sticky Prices in Economics, including historical context, implications, examples, and related terms.
The Subjective Theory of Value is an economic theory that highlights the importance of individual preferences and marginal utility in determining the value of goods and services.
The fundamental economic model explaining how prices and quantities of goods and services are determined in a market based on their availability and individuals' purchasing desires.
A comprehensive look at Supply Schedule, exploring its relationship with price and quantity supplied, and distinguishing it from the demand schedule.
An in-depth exploration of Surplus Value, its historical context, significance in economics, key events, mathematical models, and more.
An in-depth exploration of the tâtonnement process, its definition, mechanics, historical context, and application in achieving market equilibrium.
Time discounting involves placing a lower value on future receipts or payments compared to immediate ones. This encompasses pure time preference, survival uncertainty, and the expectation of declining marginal utility of money.
The ways in which changes in incomes, prices, interest rates, and other economic factors are spread between sectors, regions, or countries. This involves the working of both goods and capital markets, and their interrelations.
An examination of the Trickle-Down Theory, its historical context, key concepts, models, and its applicability in economic policies.
The Turnpike Theorem in growth theory characterizes the optimal, or welfare-maximizing, growth path for an economy, drawing analogies from historic 'turnpikes' as the fastest routes to destinations.
A unit of account is a critical function of money that allows users to measure, compare, and keep track of the value of goods, services, and financial transactions.
An in-depth exploration of utility maximization in economics, encompassing historical context, types, key events, models, examples, and its broad applicability.
An in-depth exploration of the Utility Possibility Frontier (UPF), its significance in economics, construction methodology, key events, formulas, and applications.
Explore the concept of valuation risk, its impact on financial decisions, types, historical context, key events, mathematical models, and its importance in modern finance.
A comprehensive exploration of the term 'Value' across different contexts including economics, mathematics, and general usage.
Variable Charges are costs that change in proportion to the level of consumption. This article provides a comprehensive overview, including historical context, types, key events, mathematical models, and more.
Voluntary unemployment refers to the deliberate choice by an individual to remain unemployed. This can be due to various personal reasons, including not wanting to work temporarily or seeking better job opportunities.
An in-depth exploration of Walras's Law, which states that the value of excess demand is zero, underpinning equilibrium in economic theory.
An in-depth exploration of the Wealth Effect and its influence on expenditure and economic behavior. Learn about its historical context, key events, models, and examples.
Willingness to Pay (WTP) refers to the maximum amount an individual is willing to spend for a product or service, providing insight into consumer preferences and pricing strategies.
The Accelerator Principle posits that investment levels respond to changes in the rate of growth in output, explaining how economic growth influences capital expenditure.
Adaptive Expectations is an economic theory that hypothesizes how people predict future values based on past observations. Commonly used in macroeconomic models to forecast inflation, interest rates, and other financial metrics.
An in-depth look into the concept of Aggregate Demand, its role in economics, its relationship with Aggregate Supply, and various influencing factors.
An in-depth exploration of the pricing strategy 'All the Traffic Will Bear,' where prices are set at the maximum level that customers are willing to pay.
Allocative Efficiency refers to the state where resources are distributed in a way that maximizes the net benefit received by society. See also Pareto's Law.
An in-depth exploration of asset bubbles, their causes, historical context, and impacts on the economy.
Graph illustrating the thesis that as wages increase, people will substitute leisure for working. Eventually, wages can get so high that if they increase, less labor will be offered in the market.
The Benefit Principle is a proposition in public finance asserting that those who benefit from government expenditures should be the ones to pay the taxes that finance them.
Understand the three fundamental questions that any economy must address: What to produce, how to produce it, and for whom to produce it.
A Clearing Market is one where supply and demand reach equilibrium quickly, eliminating excess supply or demand at the market price.
