Economics Made Economical

Category Archives: Vocabulary

Do You Know What Econ Is?

Economics is the study of how best to allocate scarce resources in the most efficient manner, i.e. to produce the greatest level of possible benefit to society/humanity at the lowest possible cost. Advertisements

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Tip of the Day: The Supply Curve

A producer’s Supply Curve slopes upward because as a certain good‘s sale price 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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