Positive economics is the branch of economics that deals with the description and explanation of economic phenomena. It is sometimes referred to as “normative economics” because it is concerned with what ought to be, rather than with what is. Positive economics is concerned with the construction of models and theories which can be used to … Read more
In microeconomics, a price maker is a firm that can influence the price of a good or service in the market. Price makers have some control over the price of a good or service due to factors such as production costs, market demand, and availability. The term is usually used in contrast to “price taker,” … Read more
Natural unemployment is the minimum unemployment rate resulting from the normal operation of the economy. It occurs when the economy is at its production potential and there is no inflationary or deflationary gap. The natural unemployment rate is also known as the structural unemployment rate or the full employment unemployment rate. What is another name … Read more
A business ecosystem is a community of organizations that are interdependent on each other to create a market for a particular good or service. The term was first coined by business theorist James F. Moore in his 1996 book, The Death of Competition: Leadership and Strategy in the Age of Business Ecosystems. The concept of … Read more
Neoclassical Economics: Its Importance and What It Is What is the other term for Neoclassical? The other term for Neoclassical is “neoclassical economics.” Neoclassical economics is a school of economic thought that focuses on the role of incentives and market forces in shaping economic behavior. What are the principles of neoclassical theory? The principles of … Read more
A deficit spending unit is a public or private sector entity whose spending exceeds its revenue. In the public sector, deficit spending units include the central government, state and local governments, and public corporations. In the private sector, deficit spending units include households and businesses. The term “deficit spending” is often used interchangeably with “government … Read more
The Borrowed Servant Rule is a legal doctrine that allows an employer to be held liable for the actions of an employee while the employee is working on behalf of the employer. This rule applies even if the employee is working for another company or individual at the time of the incident. What is master-servant … Read more
. What is commerce and how does it differ from business and trade? Why is it called commerce? The word “commerce” is derived from the Latin word “commercium”, which means “trade”, “marketing”, or “trafficking”. The word “commercium” is thought to have been first used by the Roman poet Ovid in reference to the trade between … Read more
Asymmetric information is a situation in which one party to a transaction has more information than the other. This often occurs in financial markets, where insiders are privy to information that is not available to the general public. Asymmetric information can lead to adverse selection, a situation in which the party with more information is … Read more
The spillover effect is an economic concept that refers to the positive or negative impact that one economic activity has on another. A positive spillover is also known as a “positive externalities”, while a negative spillover is referred to as a “negative externalities”. The spillover effect can be seen in a number of different ways. … Read more
