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Jul 20, 2021 · How do we apply economics in everyday life? From understanding different ticket prices to the diminishing returns of drinking extra beer - you mostly can't escape economics.
- Market Failure
- Business Cycles
- Competition
- Growth
- Productivity
- Employment
- Price Stability
- Goods
- Trade
Market failures are considered a part of macroeconomics. Reasons for a market failure can vary, such as poor production of certain products, failure to supply the demand, and destruction of finished products; however, all of these must be because of the economic system without any measures of reservation for it to be considered as a market failure....
The cycles of expansion and retraction within an economy are known as business cycles. Here expansion, means the increase in employment and GDP, while the retraction refers to the decline in the said aspects. Usually, there are four phases in a business cycle; expansion, peak, contraction, and trough. Unsurprisingly, business cycles impact the econ...
As the name suggests, when two firms are in a disagreement because of price, a product, or place, it gives rise to competition in the market. The International Air Transport Association (IATA) cartel is perhaps the biggest example of economic competition. As the IATA cartel fixed airfare and schedules, other firms and even members of IATA started f...
Simply, an increase in factors that boost the economy is considered growth, such as the production of goods, services, labor force, and technology. The invention of the railways during the industrial revolution is a prime example of economic growth, as it sped up the rate at which the raw material and finished products were transported, resulting i...
Efficiency in the production rate is known as productivity in economics. To calculate productivity, firms measure the ratio of GDP to hours worked. The industrial revolution itself is the biggest example of productivity in macroeconomics because it allowed entire nations to prosper and allowed humanity to advance.
Employment is the process by which a firm efficiently uses the workforce and reduces unemployment. Interestingly, governments across the world aim to achieve 0% unemployment, which can be seen as an unachievable goal. In 2020, Switzerland had the highest employment rate, at 79.9 percent. As employment increases, so does productivity, resulting in a...
When an economy doesn’t face prolonged inflation or deflation, this scenario is considered price stability. Moreover, price stability also applies when there are minuscule changes in the economy. Japan’s economy is the current generation’s best example of price stability. The economy in Japan only had an inflation of 0.1% from 2020 to 2021.
Anything that caters to the wants of humans and has a utilitarian use can be considered an economic good. Unsurprisingly, these impact the economy tremendously, resulting in them being a part of macroeconomics. For instance, Lipitor, produced by Pfizer, an American pharmaceutical company, is one of the largest selling medicine in the US for high ch...
Selling and buying certain goods and services for a designated rate with both sellers and buyers paying compensation is called trade. For instance, avocados imported from Mexico and sold in Canada is a form of trade on a macro scale.
Although the name might sound funny or a form of geometry, it is a term used to describe a specific type of market structure in economics. Once an industry or a sector is taken over by at least two independent firms or companies, it is considered an oligopoly.
Jul 29, 2024 · Explore real-life examples of economic principles in action. Learn how supply and demand, opportunity cost, externalities, market structures, and fiscal policy play out in everyday scenarios. Thousands of practice questions, study notes, and flashcards, all in one place.
Feb 17, 2020 · The Easterlin Paradox concerns whether we are happier and more contented as our real living standards improve. Within a society, richer people tend to be happier than poor people. Richard Easterlin argued that life satisfaction does rise with average incomes but only up to a point.
Dec 20, 2023 · Applying economics in everyday life illustrates how deeply it is woven into our daily decision-making. It provides a framework for understanding how we allocate limited resources like time and money, weighing the costs and benefits to maximize personal satisfaction.
Jan 7, 2017 · Economics and charity. Assuming rational self-interest, it is hard to understand why somebody would make a large anonymous donation to a charity. It could be explained by the utility (satisfaction) someone may feel from consuming the good feeling that giving to charity gives.
