What Is Economic Rent? Economic rent is a payment to a factor of production in excess of what is necessary to keep it employed in its current use. There are four types of economic rent: 1. Location rent 2. Resource rent 3. Monopoly rent 4. Differential rent Location rent is the payment made to the … Read more
The Freudian motivation theory definition is based on the work of Sigmund Freud, who believed that human behavior is motivated by unconscious drives and desires. According to Freud, these drives and desires are often in conflict with one another, and this conflict manifests itself in our behavior. For example, someone may have a desire to … Read more
The term “Peer-to-Peer (P2P) Economy” refers to an economy in which individuals can directly trade goods and services with each other, without the need for intermediaries. P2P economies are often powered by decentralized technologies, such as blockchain, that make it possible for individuals to transact with each other directly. By eliminating the need for intermediaries, … Read more
Lucas Jr.? Robert E. Lucas Jr. is an American economist who is currently the John Dewey Distinguished Service Professor of Economics at the University of Chicago. Lucas is also a distinguished fellow of the American Economic Association and a member of the National Academy of Sciences. He is widely considered to be one of the … Read more
A trade surplus occurs when a country exports more goods and services than it imports. This happens when the value of a country’s exports is greater than the value of its imports. A country with a trade surplus is said to have a “favorable” trade balance, while a country with a trade deficit is said … Read more
A take or pay contract is an agreement between two parties in which one party agrees to take delivery of, or pay for, a specified quantity of a commodity or service at regular intervals over a specified period of time, or to make periodic payments for the use of a specified facility. The other party … Read more
Pareto efficiency is a state of allocation of resources in which it is impossible to make any one individual better off without making at least one individual worse off. The concept is named after Italian economist Vilfredo Pareto, who used the concept in his studies of economic efficiency and income distribution. A Pareto efficient allocation … Read more
What is Free Enterprise? Free enterprise is an economic system in which businesses operate without government interference. This system allows businesses to compete freely in the marketplace, and businesses are free to produce goods and services that they believe people will want to buy. Free enterprise is based on the principle of supply and demand, … Read more
. Real Wages Formula: Real Income, Inflation. How do you calculate real income from nominal income and price level? In order to calculate real income from nominal income and price level, you need to use the following formula: real income = nominal income / price level For example, if someone has a nominal income of … Read more
The Indexation Definition is the rate at which the prices of a basket of goods and services changes over time. The Indexation Definition is used to measure inflation. What is indexing for inflation? Inflation is the rate at which the general level of prices for goods and services is rising and, consequently, the purchasing power … Read more
