Economics Made Economical

Category Archives: Microneconomics

Even More Benefits of the Fair Tax

The National Fair Tax has many benefits over the American government’s current tax system. I have previously discussed just some of the most basic of these. I have also tried to dispel some common misconceptions about what the Fair Tax is not. Some questions, however, remain: 1. How can the Fair Tax include raise the …

Continue reading

The Monopoly’s Effect on Society

The graph to the left shows a perfectly competitive market with an equilibrium point at a price of $200 per item and a total quantity of 3100 items being produced and sold. Because the industry is perfectly competitive, long-term net profits made by the producers are zero. For this reason, the Supply Curve is also …

Continue reading

Tip of the Day: Elasticity

A good is considered to be Elastic when a small change in its pricing leads to a large change in the quantity bought/sold. Examples include primarily perfectly competitive markets for unessential goods. A good is Inelastic when its price can be changed wildly without having a major impact on how much is purchased. Gasoline, healthcare, …

Continue reading

Supply and Demand

This is a typical Supply vs. Demand graph as used in microeconomic theory. The total Quantity of a good that all corporations in a perfectly competitive market produce lies on the X-axis. The Price of the product is on the Y-axis. As prices for a good decrease, customers are willing to buy more of the …

Continue reading

The Game Theory Grid

This is an example of the grid that economists use to determine Game Theory outcomes. The horizontal axis gives Corporation 1’s options, while the vertical gives Corporation 2’s. Pretend “Yes” means investment in a new technology and “No” means not investing. The numbers show each company’s profit gain in all four of the possible scenarios. …

Continue reading