Microeconomics

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.

Asymmetrical Information Definition

Asymmetric Information Definition

Asymmetric information or information asymmetry is where one party in a transaction has more information than the other. In other words, the seller of a good may know more about its true worth than the consumer of that good.

Social Capital Definition

Social Capital Definition

Social capital refers to the links and bonds formed through friendships and acquaintances. These links can form through friendship groups, i.e. knowing a friend of a friend.

Coase Theorem Definition

Coase Theorem Definition

Coase theorem is the idea that under certain conditions, the issuing of property rights can solve negative externalities. For example, when a farmer…

Regressive Tax Definition

Regressive Tax Definition

A regressive tax is where the tax rate falls for those who are in higher income brackets. In other words, lower-income households face a higher tax rate – as a percentage of their income – than higher-income groups.

Consumer Goods Definition

Consumer Goods Definition

A consumer good, also known as a ‘final good’, is the end product a business produces and is purchased by the consumer. For example, microwaves, fridges, t-shirts, and washing machines, are all examples of consumer goods. They are final goods that the consumer purchases.

What are the 4 types of economic goods

What are the 4 Types of Economic Goods

An economic good is a product or service that is provided to meet the needs and wants of consumers. When we want to purchase something, we go to the store on log in online and exchange money for it.