Microeconomics Archives - BoyceWire

Microeconomics

Introduction to Microeconomics

Introduction to Microeconomics (eBook) Price:   This eBook provides an introduction to basic microeconomic concepts and theories, allowing the reader to develop a fundamental understanding of microeconomics. It covers the majority of microeconomic topics within AP and A Level Economics, ranging from Market Structures to Production and Costs, to Elasticity of Demand. Sent within a couple …

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Tragedy of the Commons Definition

The Tragedy of the Commons Definition

The tragedy of the commons is where shared resources are over-exploited because each individual is following their own self-interest. If each individual only took a limited quantity, there would be enough for everyone. However, due to the self-interest of the individual, many over-exploit the resource and leave nothing left for anyone – hence the tragedy.

Human Capital Definition

Human Capital Definition

Human capital refers to the skills, habits, and other attributes each person possesses. In other words, the attributes that contribute to the production fo the final economic output.

Conspicuous Consumption Definition

Conspicuous Consumption Definition

Conspicuous consumption is where the consumer spends excessive amounts in order to highlight their wealth to society. In other words, they buy expensive items that are not needed, but are bought solely to display their wealth and power to the world.

Private property to show the importance of property rights

The Importance of Property Rights

An efficient free market is reliant on strong property rights as a fish is to water. Its purpose is to ensure that competitive control over economic resources is resolved in a peaceful way. Rather than disputes leading to violence, they can be resolved through the legal system.

Invisible Hand Definition

The Invisible Hand Definition

The invisible hand was first coined by Adam Smith in 1776. In his book ‘The Wealth of Nations’, he explained how the self-interest of the individual benefits the rest of society. In other words, by pursuing the profit motive, people provide goods that others want at a price they are willing to pay. Therefore, society benefits because those goods would not be produced otherwise.

Producer Surplus Definition

Producer Surplus Definition

The producer surplus is the difference between what the producer sells its goods for and the minimum price it would be willing to sell for. In other words, because the producer is selling at a higher price than they would accept, a ‘producer surplus’ is created.

Monopsony Definition

Monopsony Definition

A monopsony is where there is a sole buyer of a product, but many sellers. This contrasts with the similarly named monopoly, whereby there is only one seller and many buyers.

Perfect Competition graph

Perfect Competition

Perfect Competition is a type of market structure. In short, perfect competition is a market structure whereby there are many firms that sell a similar product.