Ask an Economic Question

You are welcome to ask any questions on Economics. Though you might also like to try google custom search (top right) to see if the topic has been covered before.

I am looking to explain economic principles / ideas/ recent developments in economics. I can’t promise to answer, but will try if it meets the criteria below.

  • Please don’t ask me to do your coursework / assignment e.t.c. (I can usually tell if it is a homework question!)
  • Please don’t ask any maths calculations.
  • The question and answer will be published here where everyone can see it (including your teacher!)
  • I aim to try and simplify economics; as a rough guide I would aim at an understanding similar to a good British A Level student.
  • I am looking to explain economic principles / ideas/ recent developments in economics.
  •  I will answer as a new post, if you leave email address, I’ll usually send quick email. Check home page of blog for new post. With question and answers

Add comment at bottom of post.


2,512 thoughts on “Ask an Economic Question”

  1. In our country (South Africa) we had riots others they call it looting and that had an impact on our food securities, retailer industries, transport industry and mining industry and our government tried their best to help small businesses that had been affected by this looting.

    If I may ask ” how will the PPF” be affected?

  2. Hello Mr. Tejvan, I am using, reading and loving your blog and posts. Please how do I reference you/them?

    I also have other questions.

  3. The need of government intervention in an oligopoly market is
    A) to ensure that competition between firms exists to benefit consumers.
    B) to ensure low prices in the market.
    C) to regulate the production process.
    D) to ensure the goods and services are distributed evenly.

    • The answer is A the other answers are the benefits that will flow out from the Government Intervention of breaking up the Oligopoly, but B C and D are benefits of the increased Competition, but the companies and market forces will be the ones to deliver B C and D

  4. What will act as a barrier to collusion between firms?
    A) An ability to detect price cuts by rivals
    B) The existence of a small number of firms in the industry
    C) The abolition of anti-trust measures
    D) Unstable demand conditions for products

  5. Use the table given below to answer the following questions:

    Commodity Before After
    Price per cup (Rs.) Number of Cups (per month) Price per cup (Rs.) Number of Cups (per month)
    Coffee (C) 40 50 60 30
    Tea (T) 20 40 20 50

    a. Calculate the own price elasticity of coffee (C).
    b. Calculate the cross price elasticity of tea with respect to coffee. (Hint: use the response of change in quantity demanded of tea to price change of coffee).

  6. Discuss whether taxation or changes in regulation would be more successful solving the market failures arising from negative externalities caused by increased road transport use?

  7. My question is related to the Kuznets estimation. I have read a lot of articles about inequality and Kuznets, they tend to create a new independent variable “log squared GDP” in a linear equation when “GDP”, as another independent variable existed in the equation. Why is it? Does the log squared GDP make any difference to the analysis of Kuznets curve?
    For example: I could just interpret the negative coefficient of GDP as there is a negative relationship between Gini and GDP. They didn’t explain specifically about this on their articles so I don’t know what’s the purpose adding a brand new independent variable in this case.

  8. Hi,
    I just want to know the economic implication of keeping Interest rates (and other monetary parameters) unchanged for a long period of time (almost two years)? Since November 2020, monetary authority in Nigeria keeps MPR at 11.5%. However, growth is promising, with GDP expanding at 3.98% during Q4 of 2021. But, the economy is battling with rising inflation, poverty and debt, unemployment, infrastructural deficit among other issues .

  9. Hi
    I just want to know how the following questions can be solved.
    (A)How much did quantity damand fall?suppose Edgar changed from $60 to $65 and PED was 0.5.
    (B)Suppose a research conducted in Nigeria indicated that the price elasticity of demand for coca cola is around 0.3.if a bottle of Coca-Cola on average currently costs $7 and the government wants to reduce the consumption of Coca-Cola by 10%.Determine by how much the government should increase the price?

    The current policy of cutting supply of American energy has resulted in huge price increases, we all are checking our bank account before we fill up,
    This is Backward thinking if we just make energy so expensive everybody will just run out and get solar and put a windmill in the front yard. Cheap American Energy is the Solution to the problem. How do you eat a whale? one bite at a time? Everyone is broke buying gas they can’t go out and buy solar panels, we have to convert from fossil fuels simply because it is a finite resource. We have the technology to reduce emissions we need to sell this to India and China and Global emissions will reduce greatly and quickly; The Law of unintended consequences is being enforced here astronomical Oil Prices the Oil Companies are making more money not less which is a good thing profit
    can be used to afford the conversion. If in 1980 we produced one percent a year green
    energy where would be now that would be 42 percent Green.

  11. In the value paradox you describe, wedding rings are a bad example. Only unique diamonds belong to the paradox. The classical theory of supply is not suitable for them.


Leave a comment

Item added to cart.
0 items - £0.00