Category Archives: Vocabulary

Tip of the Day: The Supply Curve

A producer’s Supply Curve┬áslopes upward because as a certain good‘s sale┬áprice increases the producer is inclined to produce more of the good. On the other hand, as a good’s sale price decreases, suppliers’ tendency is to cut back on production of the good and focus their resources on production of more profitable items.

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Tip of the Day 13: The Laffer Curve

The Laffer Curve is a graph that compares federal tax rate to government income from the tax. It is most often shaped like an upside-down parabola, with a maximum point shown at the 50% tax rate. The Laffer Curve is important because it demonstrates that higher tax rates often end up being counterproductive as more …

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Vocab of the Day: Investment

Investment is one component of GDP, along with personal consumption, government spending, and net exports. In marcoeconomic theory, the word typically has a very different meaning than it does in everyday language, as is the case when we’re looking at Investment as a component of GDP. The Investment category comprises goods that aren’t purchased for …

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Tip of the Day 10: What Is Efficiency?

Economic Efficiency is a market equilibrium point where supply and demand meet in a perfectly competitive industry. In a world where perfect economic efficiency exists, everything that is produced or consumed is done in the way that maximizes society’s gross utility. When a market is efficient there is no net loss of utility to society, …

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Tip of the Day 8: Human Life Value

The Value of a Human Life is currently $5.8 million according to the U.S. government. This is a theoretical statistical valuation representing how much money it is worth spending in order to save an average hypothetical American’s life. This measurement is not used in terms of a specific individual and his or her specific situation; …

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