Environmental sustainability is concerned with whether environmental resources will be protected and maintained for future generations. Issues of environmental sustainability Environmental sustainability is concerned with issues such as: Long-term health of ecosystems. Protecting the long-term productivity and health of resources to meet future economic and social needs, e.g. protecting food supplies, farmland and fishing stocks. …
Cobweb theory is the idea that price fluctuations can lead to fluctuations in supply which cause a cycle of rising and falling prices. In a simple cobweb model, we assume there is an agricultural market where supply can vary due to variable factors, such as the weather. Assumptions of Cobweb theory In an agricultural market, …
Definition: Static efficiency is concerned with the most efficient combination of existing resources at a given point in time. For example, static efficiency involves the concept of productive efficiency – producing at the lowest point on the short run average cost curve – given existing resources and factor inputs. Static efficiency is also concerned with …
Summary: Cardinal utility gives a value of utility to different options. Ordinal utility just ranks in terms of preference. Cardinal Utility is the idea that economic welfare can be directly observable and be given a value. For example, people may be able to express the utility that consumption gives for certain goods. For example, if …
Definition of allocative efficiency This occurs when there is an optimal distribution of goods and services, taking into account consumer’s preferences. A more precise definition of allocative efficiency is at an output level where the Price equals the Marginal Cost (MC) of production. This is because the price that consumers are willing to pay is …
A production possibility frontier shows how much an economy can produce given existing resources. A production possibility can show the different choices that an economy faces. For example, when an economy produces on the PPF curve, increasing the output of goods will have an opportunity cost of fewer services. Diagram of Production Possibility Frontier Moving …
Readers Question: how to evaluate the reliability of economic data? This is a good question. In brief, some issues to consider Is there a political angle? – Political leanings of media/think tank In what context is the data presented? How to interpret the data. Should we look at nominal data, real data or as a …
New statistics from the ONS, show that there are large disparities in wealth within the UK. In 2010/12, aggregate total wealth of all private households in Great Britain was £9.5 trillion, (increasing from £9.0 trillion in 2008-10. Some highlights from the report The wealthiest 10% of households owned 44% of total aggregate household wealth. The …