Macroeconomics Macroeconomics examines the economy as a whole to explain broad aggregates and their interactions "top down", that is, using a simplified form of general-equilibrium theory.
Information economicsGame theoryand Financial economics Uncertainty in economics is an unknown prospect of gain or loss, whether quantifiable as risk or not. Instead, on the supply side, they may work in and produce through firms.
Since at least the s, macroeconomics has been characterized by further integration as to micro-based modelling of sectors, including rationality of players, efficient use of market information, and imperfect competition. Among each of these production systems, there may be a corresponding division of labour with different work groups specializing, or correspondingly different types of capital equipment and differentiated land uses.
Economic efficiency measures how well a system generates desired output with a given set of inputs and available technology. Natural monopolyor the overlapping concepts of "practical" and "technical" monopoly, is an extreme case of failure of competition as a restraint on producers.
Welfare economics is a normative branch of economics that uses microeconomic techniques to simultaneously determine the allocative efficiency within an economy and the income distribution associated with it.
For the consumer, that point comes where marginal utility of a good, net of price, reaches zero, leaving no net gain from further consumption increases.
Supply and demand The supply and demand model describes how prices vary as a result of a balance between product availability and demand.
The "Law of Supply" states that, in general, a rise in price leads to an expansion in supply and a fall in price leads to a contraction in supply.
Public goods are goods which are under-supplied in a typical market. Along the PPF, scarcity implies that choosing more of one good in the aggregate entails doing with less of the other good.
This pushes the price down. Producers, for example business firms, are hypothesized to be profit maximizers, meaning that they attempt to produce and supply the amount of goods that will bring them the highest profit. It has been described as expressing "the basic relationship between scarcity and choice ".
Part of the cost of making pretzels is that neither the flour nor the morning are available any longer, for use in some other way. Other inputs are relatively fixed, such as plant and equipment and key personnel. This method aggregates the sum of all activity in only one market.
For movement to market equilibrium and for changes in equilibrium, price and quantity also change "at the margin": Examples cited of such inefficiency include high unemployment during a business-cycle recession or economic organization of a country that discourages full use of resources.
A widely accepted general standard is Pareto efficiencywhich is reached when no further change can make someone better off without making someone else worse off. It has significant applications seemingly outside of economics in such diverse subjects as formulation of nuclear strategiesethicspolitical scienceand evolutionary biology.
General-equilibrium theory studies various markets and their behaviour.
Theory and observation set out the conditions such that market prices of outputs and productive inputs select an allocation of factor inputs by comparative advantage, so that relatively low-cost inputs go to producing low-cost outputs.Find great deals for Modern Economic Regulation: An Introduction to Theory and Practice by Christopher Decker (, Paperback).
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