Marginal utility theory examines the increase in satisfaction consumers gain from consuming an extra unit of a good. Utility is an idea that people get a certain level of satisfaction/happiness/utility from consuming goods and service. Marginal utility is the benefit of consuming an extra unit This utility is not constant. Often we get diminishing marginal …
In both the UK and US, politicians are proposing significant, above-inflation increases in the minimum wage. The US is proposing an increase from $7.50 to $15 by 2024. The arguments for raising the minimum wages include – reduced in-work poverty, a reduction in inequality, an incentive to increase labour productivity and higher wages leading to …
Economics affects our daily lives in both obvious and subtle ways. From an individual perspective, economics frames many choices we have to make about work, leisure, consumption and how much to save. Our lives are also influenced by macro-economic trends, such as inflation, interest rates and economic growth. Summary – why economics is important The …
Economic development implies an improvement in economic welfare through higher real GDP, but also through an improvement in other economic indicators, such as improved literacy, better infrastructure, reduced poverty and improved healthcare standards. Policies for economic development could involve: Improved macroeconomic conditions (create stable economic climate of low inflation and positive economic growth) Free market …
The Labour Party has announced a policy to nationalise full-fibre optic broadband provision and offer free broadband to every UK home. It is an ambitious policy which would involve costs of £20-£40bn to purchase Openreach from BT (Labour suggest £20bn, BT, £40. Do the benefits of nationalisation outweigh the costs? Arguments for nationalisation External benefits …
Readers Question: What is the role and function of price in the economy? The price of goods plays a crucial role in determining an efficient distribution of resources in a market system. Price acts as a signal for shortages and surpluses which help firms and consumers respond to changing market conditions. If a good is …
An economic shock is a negative event affecting the economy it can involve Demand-side shock Supply-side shock Global shock Loss of confidence in the currency and banking system. Policies to deal with economic shocks include Monetary policy – to reduce inflation or boost economic growth Fiscal policy – higher government borrowing to finance higher government …
Microeconomics is concerned with the economic decisions and actions of individuals and firms. Within the broad church of microeconomics, there are different theories that emphasise certain assumptions and expectations of economic behaviour. The most important theory is neo-classical theory, which places emphasis on free-markets and the assumption individuals are rational and seek to maximise utility. …