Readers Question Can you tell me: Is speculation on a hot real estate market a counterexample to the law of demand or indirect evidence of it? The Law of Demand One of the first things you learn in economics is the basic law of demand – When prices rise, people buy less. When prices fall, …
Definition The observation that some goods (e.g. water) which are more essential to human life can be cheaper than non-essential goods (e.g. diamonds) Paradox of value – Economics explainedWatch this video on YouTube Explanation The paradox of value examines why goods that are not essential to life can command a much higher price than goods …
Definition of a Giffen Good. A good where a higher price causes an increase in demand (reversing the usual law of demand). The increase in demand is due to the income effect of the higher price outweighing the substitution effect. The concept of a Giffen good is limited to very poor communities with a very limited …
Definition of a Veblen Good. A Veblen good is a good where demand rises as price rises because people feel its higher price reflects greater status. Readers Question: I once ran across a term and now can’t find it. It’s the economic theory that consumers will purchase a product or service which cost more money …
Readers Question: Why are more students going to university, despite the increased costs associated with higher education The number of students in full time education has dramatically increased in the past few decades. In the 1960s and 1970s, a full time university degree was a minority choice, but it has become increasingly popular. It is …
Will Printing Money and QE cause Runaway Inflation?Watch this video on YouTube After the First World War, the German government were left with huge debts and reparation payments to the Allies. Faced with striking workers the government began printing money to pay workers higher salaries. It gave the government a temporary breathing space, …
Why Local Councils Are Going BANKRUPTWatch this video on YouTube Rubbish piled up on the streets was one of the most evocative images of the 1970s. But the winter of discontent is back with Birmingham city council struggling to stave off bankruptcy. But, it’s not just Birmingham, the national audit office argue that a cumulative …
US Debt is Set to Massively INCREASE – Does it Matter?Watch this video on YouTube As a share of GDP, US debt is forecast to rise from the current level of 100% of GDP towards 180% by 2050. This is unprecedented – higher than the second world war. However, the recent budget resolution to …