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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2,583 thoughts on “Ask an Economic Question”

  1. Hello, I would like to ask regarding this statement:

    Disadvantages of Price Discrimination:
    … 3. Those who pay higher prices may not be the poorest. E.g. adults could be unemployed, OAPs well off.

    (link to the article: https://www.economicshelp.org/microessays/pd/price-discrimination/)

    It seems to me that it is implying that the poorest should be paying the higher price since they (the poorest) not paying the higher price would be a disadvantage. I may have misunderstood the statement and it would be nice if you could enlighten me with my dilemma.

  2. how can one solve the consumption expenditure that has the autonomous income,gross income and the mpc marginal propensity to consume.

    • it depends with he elasticity you are dealing with because if its perfectly inelastic meaning that the quantity demanded has not changed due to price increase change it then means that the sellers are now getting more money per se at $4 dollars people are willing to buy 100 cones of ice cream and at $5 they are still willing to buy 100 the company is bound to be taxed more because they are now making more profit

  3. “For example:

    If the price of meat increases, then the higher price may encourage consumers to switch to alternative food sources, such as buying vegetables.
    However, with the higher price of meat, it means that after buying some meat, they will have lower spare income. Therefore, consumers will buy less meat because of this income effect.”

    Should that say “Therefore, consumers will buy less VEGETABLES because of this income effect”?

    • The income effect looks at how change in disposable income affects demand for that particular good, so it is correct.

      Though it is also true, that consumers may also demand fewer vegetables too.

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