Definition A surplus occurs when the amount of a good or assets exceeds the quantity actively used. If a firm supplies one 1,000 Christmas Trees, but there is demand for only 400, then it will have a surplus of 600 unsold Christmas Trees. If the price was stuck at P2, the supply (Q3) would be …
Technological unemployment occurs when the adoption of new technology causes job losses. Automation is a process of using robots, AI and machines to take the place of workers – not just in manufacturing, but increasingly new avenues – even in the service sector. The pace of automation is causing job disruption – with workers – …
Readers Question: What is the difference between growth and development? Can a country experience economic growth without development? In summary Economic growth means an increase in real national income / national output. Economic development means an improvement in the quality of life and living standards, e.g. measures of literacy, life-expectancy and health care. Ceteris paribus, …
Labour shortages occur when employers struggle to fill labour vacancies because of insufficient labour applying for the jobs. Labour shortages can occur in geographical regions or in occupations with special requirements in terms of skill or function. Labour shortages can also be seasonal in industries like retail (Christmas) and agriculture (harvest time). Recently, since Brexit …
Covid raises many problems for society and offers quite a few examples of market failure. These include: Externalities. A young person catching Covid may face few personal costs, but there is an external cost because they may transmit to more vulnerable people. Information asymmetries. There is a lot of misinformation about Covid and vaccines. This …
There are many costs associated with inflation; the volatility and uncertainty can lead to lower levels of investment and lower economic growth. For individuals, inflation can lead to a fall in the value of their savings and redistribute income in society from savers to lenders and those with assets. At extreme levels, inflation can destabilise …
Readers Question: Is education a consumption good or investment good? And why I would say education can be both a consumption good and an investment good. Consumption is defined as spending money on a good or service for the acquisition of utility. Investment is defined as spending money on a good or service for the …
Since the mid-1960s, the UK has seen a 40% fall in total CO2 emissions. CO2 Emissions are now below levels seen at the end of the industrial revolution. Summary of why CO2 is falling Decline in coal-powered stations. In 2012, coal generated 41 per cent of the country’s electricity. By 2019, it supplied just 2 …