Price gouging is a situation where business take advantage of an external crisis to charge excessive prices for basic necessities – selling the goods significantly above their usual price. Many countries have laws against the practise of price gouging – to protect consumers against unfairly high prices during a national emergency. Example of price gouging …
I started www.economicshelp.org in Nov 2006. Within a year, I was writing about the US housing crash, the credit crunch and the recession of 2008/09. It was a turbulent period and there was a surge of interest in economics, which helped the economics blog to take off (which left me with mixed feelings!) But, the …
This is a review of economics and its relationships with other social sciences and subjects, such as philosophy, politics, maths, physics, anthropology, psychology and sociology. Also, to what extent does economics benefit from expanding into other subjects? What is economics? Economics a social science that studies the production, consumption and distribution of goods and services. …
Definition of a liquidity trap: When monetary policy becomes ineffective because, despite zero/very low-interest rates, people want to hold cash rather than spend or buy illiquid assets. A liquidity trap is characterised by Very low-interest rates Low inflation Slow/negative economic growth Preference for saving rather than spending and investment Monetary policy becomes ineffective in boosting …
The elasticity of supply measures the responsiveness of a change in quantity supplied to a change in price. If price increases – firms generally find it more profitable to supply a good. So an increase in price leads to higher supply. However, if it is difficult to increase supply (e.g. shortage of capacity, difficulty to …
Supply side policies are efforts to increase competitiveness and efficiency in the economy. They can include policies such as tax cuts, privatisation, investment in education and more flexible labour markets. Usually, supply side policies are long-term efforts to increase productivity and the long-run trend rate of growth. The traditional solution to a recession is to …
Organic food is a big growth area for consumer demand. Once thought to be the preserve of the wealthy or eco-eccentrics, organic food is going mainstream with many people from across the spectrum wishing to purchase organic food. Organic farming avoids the use of artificial fertilisers and pesticides but relies on more traditional methods of …
Definition: Price elasticity of demand (PED) measures the responsiveness of demand after a change in price. Example of PED If price increases by 10% and demand for CDs fell by 20% Then PED = -20/10 = -2.0 If the price of petrol increased from 130p to 140p and demand fell from 10,000 units to 9,900 …