In a recent post, we looked at the advantages of free movement of labour. But, what about the problems which might arise from free movement of labour? Firstly, free movement of labour depends on the area in question. To make an easy contrast, initially, the EU was free movement of workers between 12 / 15 …
In recent years, airlines have become adept at charging customers for ‘extra services’. These extra services include: Seats with more leg room. Choosing a seat earlier Paying a penalty to check in at airport (budget airlines) Priority boarding Checked in luggage (budget airlines) Meals debit /credit card surcharges (Ryanair) Economic concepts involved Price discrimination/ price targeting …
Definition of knowledge economy The sector of the economy which is increasingly based on knowledge-intensive activities, creating a greater reliance on intellectual capital rather than physical inputs. The OECD state the knowledge economy is associated with: High-tech manufacturing (computer, electronics, aerospace), Service sector industries, such as education healthcare and software design Business services such as …
Definition of free movement of labour – It means that workers are entitled to look for work in another country, without requiring any visa. Free movement of labour is a fundamental principle of the EU. It means EU citizens are entitled to look for a job in another EU country. Also, qualifications are universally accepted …
The credit crunch refers to a sudden shortage of funds for lending, leading to a decline in loans available. A credit crunch can occur for various reasons: Sudden increase in interest rates (e.g. in 1992, UK government increased rates to 15%) Direct money controls by the government (rarely used by Western Governments these days) A …
Following on from yesterday’s post. Is it rational to pay £1 for a bottle of water? This photo was taken at Stanstead Airport. You could easily take a bottle without paying. No-one would notice at all. It’s not even clear it would be a crime. Therefore, is it rational to pay? One logic is to …
Homo Economicus is a hypothetical concept that humans are: Self-interested Know what they want Make rational choices to maximise their utility. These choices are based on the concept of marginal utility. This concept of a rational economic man is an important cornerstone of neo-classical economic theory. It creates a framework to model how consumers and …
Summary: Productive efficiency is concerned with the optimal method of producing goods; producing goods at the lowest cost. Allocative efficiency is concerned with the optimal distribution of goods and services. Example: An economy could be productively efficient in producing large numbers of boots – but if they were all for the left foot, it would …