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 so that 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

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mail(at)econoimcshelp.org

2,583 thoughts on “Ask an Economic Question”

  1. i was reading about the micro and macro comparisons
    my question is why slope of AS doesn’t starts from origin and why supply curve starts from origin ?

  2. There is currently a debate underway in the UK about the extent of the recovery from recession and  what impacts the recovery has had for different types of people in the UK.    

    a.Describe what has happened to real GDP in the UK over the past 10 years, using a chart to  assist in your answer (annual data are available here (http://www.ons.gov.uk/ons/datasetsand‐tables/data‐selector.html?cdid=ABMI&dataset=qna&table‐id=A2) or from ONS (2014b) How do you think i should go about answering this question. Any tip would be much appreciated. Thank you very much in advance.

  3. Suppose that Erin spend her incomes on two goods, food (X) and clothing (Y), and that her utility function is given by U(X,Y)=.20X2Y2 (The marginal utility for X is .40XY2 and that for Y is .40X2Y ). The prices of food and clothing are $10 and $20 for each unit, respectively. Her income is $500 per week.

    1.Find the level of her utility when she purchases 10 units of food and 20 units of clothing every week.
    2.In (a), find her marginal rate of substitution.
    3.Find her choice for X and Y when she maximizes her utility given her budget constraint.

  4. Perfect competition: Explain the short run effects of the increase in labour costs on market price, output and profitability by means of an illustration.

    From a market perspective supply shifts to the left pushing prices up. From a firms perspective, there should be a movement of the ATC curve moving upward from p1 to p2. The firm should experience a loss in profit due to the labour cost increases. Can this be confirmed? I would like to compare my graph if possible.
    Thanks.

  5. If used cars are a normal good and consumers’ incomes were to fall during the next few years, what would happen to the market clearing price of used cars?
    Also, if the price changes would the cause a change in the supply of used cars or in the quantity supplied?

  6. why is the average cost curve in a monopsony, also known as the supply curve of that monopsony? what is the link between those two curves?

  7. How do central banks calculate how much money to inject into economy using Quantitative Easing?

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