In accounting , there is a different technical concept of cost , which excludes implicit opportunity costs. In common usage, as in accounting usage, "cost" typically does not refer to implicit costs and instead only refers to direct monetary costs. In economics, demand refers to the strength of one or many consumers' willingness to purchase a good or goods at any in a range of prices. If, for example, a rise in income causes a consumer to be willing to purchase more of a good than before contingent on each possible price, economists say that the income rise has caused the consumer's demand for the good to rise.
In contrast, if a change in market conditions leads to a decline in the price of a good resulting in a consumer's being willing to buy more of it, economists say that the consumer's quantity demanded of the good has risen.
A change in quantity demanded is represented by a movement along the demand curve , while a change in demand is represented by a shift of the demand curve. In popular usage a change in "demand" can refer to either what economists call a change in demand or what economists call a change in quantity demanded. While "marginal" in common usage tends to mean "tangential", implying limited importance, in economics " marginal " means "incremental".
For example, the marginal propensity to consume refers to the incremental tendency to spend income on consumer goods: Likewise, the marginal product of capital refers to the additional production of output that results from using an additional unit of physical capital machinery, etc. If very small increments are being considered, so that calculus is used, then this ratio of incremental amounts is a derivative for example, the marginal propensity to consume becomes the derivative of consumption with respect to income.
In common usage, "significant" usually means "noteworthy" or "of substantial importance". In econometrics — the use of statistical techniques in economics — " significant " means "unlikely to have occurred by chance". For example, suppose one wishes to find if the minimum wage rate affects firms' decisions on how much labor to hire.
If the data show, on the basis of statistical techniques, an effect of a particular non-zero magnitude, one wants to know whether that non-zero magnitude could have arisen in the data by chance when in fact the true effect is zero. Note, however, that the less precise phrase "economically significant" is sometimes used by economists to mean something very similar to the common usage of "significant".
If the effect of the minimum wage on hiring decisions were found to be very small and yet the numerical result is very unlikely to have occurred only by chance, then the estimated effect is said to be statistically significant but not significant economically. In common usage "biased" generally means "prejudiced". In econometrics, the estimate of the effect of one thing on another say, the estimate of the effect of the minimum wage upon employment decisions is said to be " biased " if the technique that was used to obtain the estimate has the effect that, a priori , the expected value of the estimated effect differs from the true effect, whatever the latter may be.
In this case the technique, as well as the estimate obtained with the technique, is called "biased". Researchers are likely to view a biased estimate with suspicion. In general usage "elasticity" refers to flexibility. In economics it refers to a quantitative measurement of the degree of flexibility of something in response to something else.
The change in the denominator always causes the change in the numerator, so the elasticity can be said to be the ratio of a percentage change that is caused to the percentage change of something that is causative.
In general usage, one is said to be rational if one is sane or lucid. This is because of two reasons: Because of these reasons, the economy as a whole in the form of planning can visualize a longer and larger horizon as compared with an individua1. In this way, planning offers greater and wider opportunities as compared with market.. In market economy only those goods are produced whose demands are backed by money offers.
As a result the production of public goods like education, health services, parks, old-age institutes, orphan houses and shelters for homeless person etc. Thus in capitalism when all the allocative and distributional activities move around the money vote, the resources will hardly be allocated for the socialization of the society.
This will have a negative effect on the efficiency of the masses. Hence, it is the planning which distributes the resources between present consumption and future consumption, social development and economic development etc. As a result the goals of planned society are more welfare and public oriented.. The market mechanism is furnished with unused and idle capacity during depression.
This situation adversely affects the employment, output and potentialities of the economy. But in case of planned economy, there is no possibility of occurrence of trade-cycle and its devastating consequences.
Here, an equality between demand and supply is brought about in advance. In the market economy, there are wasteful expenditures in the form of selling costs etc. Here a rivalry develops amongst the producers. While in a planned economy, the producers do not have to make expenditures on advertisement and sales promotion activities.
Here the producers are partners, rather than rivals. Thus in planned economy, there is greater and optimal use of resources.. The market economy is characterized with the limited resources. Here, one's resources may be consisting of savings, profits and share money etc. On the other hand, the planned economy has greater, command over' resources. In addition to private savings, govt. These resources which have been obtained by curtailing the consumption will be of greater significance for the UDC which are engaged in providing benefits to present as well as future generation.
Thus, we say that devices to raise funds or compensatory finance do not exist 'in unplanned laissez-faire system. In addition to these monetary resources, the planned economic system can make better calculations regarding' manpower, land resources, forests and minerals.
Moreover, under planned system, the planning authority can enlarge the future horizon of resources by modifying the production activity. A government can opt for a program which makes available more resources in future. A choice among construction of new plants or discovery of oil fields; facilities of higher education or primary education; improving the sanitation system or following the malaria eradication program providing job opportunities to women or following birth control devices - such a11 will affect the quantum and quantity of resources that will become available in future.
While such all cannot be conceived, by the market system. Thus planning not only eliminates the wastage of resources but also leads to augment the resources in future.. In a planned economy not only the production of goods and services may be greater, but the pattern of produced goods and services may also be different. This can be observed from this fact that planned economies divert major share of their resources in the production of capital goods rather in the production of consumer goods.
The planned economy plans by keeping in view the needs of future. While in the market economy the individual producers act upon myopic vision that they have a short life span. The planners think that the community is immortal, hence the resources be diverted in such a way that future people could also avail the benefits.
In connection with adopting a choice of technique in market economy, each producer will follow such a technique which yields him abnormal profits and superiority over others. Because of such temptations, the monopolies and cartels grow. While in the planned economy, such technique of production will be followed which is best suited from community's point of view - mostly labor intensive technique of production.
This means that in market economy there is a pursuit of profit. While in planned economy, the employment strategy is given preference.. In a market economy investments are determined by the time preferences of individual savers. These preferences of investors may not be compatible with.
The individual preferences are irrational; the irrationality consists in discounting the future properly. On the other hand, under planned economic system, not only the amount of savings and investment can be greater, but the investment can also be made in those fields commanding greater social considerations.. The capitalist economies are not only furnished with inequitable distribution of income and misallocation of resources, but there are also a variety of chances of unearned incomes and windfal1 gains as well as losses , etc.
Such incomes may be spent lavishly on luxuries and other unproductive channels. While in the planned economies on the one side the distribution of income can be made fair, while on the other side there is no possibility of such windfall gains etc, hence no wasteful consumption expenditures.
As a result, there will be no class conflict in the planned economy, no possibility of have and have-nots; no privileged class and no deprived class and there is equalization of opportunities in respect of skill, training and education etc. If a market economy, whatever the efforts are made to raise the incomes or-lower class, there is no guarantee that inequalities will lessen.
If the incomes of low income brackets are increased, the incomes of high income brackets win. This is concerned with the basic proposition of market economy that it cannot exist without private property and unequal income distribution:. A planned economy can give priorities to the matters relating to national tasks and deal the matters relating to emergencies in a better way.
As for security purpose, it can divert the resources from the civilian to military sector, i. Again, after the war, it can convert the war based economy to peace time needs. The planned economy can build the war affected sectors of the economy in a better way than a market-oriented economy. Moreover, the planned economy can do the best in connection with the development.
It can divert the resources of the economy in those fields which will directly or indirectly promote economic growth. Planned economy can ensure a balance in between saving and investment; consumption and income; outgoings and incomings in the external sector of the economy. No one can refute to admit that planned economy is more suitable to face the national emergencies like crop failures, earthquakes, epidemics, storms and floods etc. On the other hand, market economies fail to deal properly with the emergencies, natural calamities, national development and war time needs.
Accordingly, the social and economic wastes under market economy will be more as compared with the planned economy.. Now-a-days the problems of foreign trade have become more acute. The terms of trade are going against them. They have to confront with protectionist policies on the part of DCs.
The debt burdens are mounting. The international financial and developmental agencies charge heavy interest rates. The gap between have and have-nots is increasing day by day. Such an problems relating to open economy are attributed to market economy. Therefore, to remove them some type of planning is required..
In 'Laissez-Faire' economy every body is inspired of self-interest. As a result, it may happen that some good is produced in abundance while there is shortage of some other goods. As in case of Pakistan an efforts were made to develop textile industry while steel, iron and automobile like industries were completely ignored.
Moreover, there is a concentration of industry in the overcrowded cities like Karachi, Faisalabad and Multan while Baluchistan remained like an island of backwardness. Thus to bring co-ordination between economic activities and remove regional disparities planning is advocated.. There are so many social evils in the free enterprise economies like illiteracy, poverty, redtapism, bribery, black-marketing, generation gap, industrial problems, problems relating to urbanization and corruption, etc.
Therefore to remove them state intervention in the form of economic planning is justified.. In market economies of poor countries not only there are market imperfections but one can also find price distortions both in commodity as we11 as in factor market. These distortions rise because of institutional arrangements. As the wage rate in some sectors of the economy exceeds the opportunity cost of the labor. This may be due to trade-unionism etc.
Moreover, the goods whose demand is less elastic their producers may pursue monopolistic' behavior. There may be dualistic practices in the money market. In the organized money market the rate of interest is kept artificially low or inexpensive credit facilities are provided to the favored clients like big businessmen and industrialists.
While on the other hand in rural areas the rate of interest is extraordinarily high. This situation also results in price distortions. Again in the presence of severe inflation, the real rate of interest will be negative where cheap credit money policy is adopted. In developing countries major part of money market is dominated by a minority of borrowers. The bibliography is alphabetized by an author's last name. How do economists define demand? Demand refers to the amount of a type of good or service that consumers are capable and willing to buy at a specified price.
What are 2 terms that refer to the economic system in the US? The United States currently has a "Fractional Monetary Reserve System" although the system was originally a "Specie-backed" system each dollar backed by a quantified amount of gold, "The Gold Standard". Why do people use the term 'American' to refer to white people? Americans aren't always white, and whites aren't always American.
A white person is one who is ethnically European. They can trace their ancestry to the continent of Europe and to the Caucasus mountains, from which their earliest ancestors are believed to have originated. An American is a citzen of the United States. What term does the MLA use for the bibliographical references?
This is one of the first things that people need to know while writing MLA bibliography. Why do economists use percentage change to calculate elasticity demand?
What are some slang terms you use to refer to men and women? Slang terms for a woman: What term is commonly used to refer to the bending of light? Is it wrong to use the term--at about--with reference to time? If we want to identify a precise time we would say something like "I'll call at 3 o'clock. However, when speaking, sometimes we change our thoughts in mid-sentence.
In this case we were probably going to state the exact time, but then we realised, for some reason or another, that it would be better to give an approximation. So we said "I'll call at What do economists mean by the term market? What does the term demand refer to in economics?
The term demand in economics refers to the total amount of demand at all possible prices. Demand's definition is how much the consumers want a product.
What are key economic variables that economists use to predict a new phase of a business cycle referred to as? They are called leading indicators. Things such as adrop in sales or foot traffic are all considered leadingindicators. Which term does the MLA uses for bibliographical references? The bibliography MLA style is very simple to do.
Nevertheless, bibliography is not the term applied in this format. In a bibliography, people will need to list down all the works they accessed in the course of their research regardless of whether they are cited within the paper or not.
With MLA, works cited is the section's name. While many people think that the terms are synonymous, but they are actually not. The quotation is incorrect: An increase in price causes a decrease in the quantity demanded, not a decrease in demand. Why do most economists use the aggregate demand and aggregate supply model? Because using aggregate demand and aggregate supply is a good way to see the big picture of the economy, which is most of the point of macroeconomics, and because they can be related to each other in meaningful, logical ways.
Is to correct to use the term black when referring to Barack Obama? However, it should be noted that the president is biracial, since his mother was white and his father was black.
Still, although inter-racial marriages are more common today, the word "biracial" is not used very much in American conversation, even when it is an accurate description. There is still a tendency to identify a person who is half-black as "black. But for now, it is certainly correct to refer to President Obama as black, and he has often been called America's first black president.
What is the terms that can be used in describing the direction of an object from the reference point? The Church spire is at a bearing of 80 degrees from here meaning just north of East. How would an economist use supply-and-demand analysis to explain the increase in the price of gasoline in the US right after Hurricane Katrina?
An economist or anybody who really thought about it for a moment would say that Katrina destroyed many fuel storage facilities and refining resources along the Gulf Coast. Additionally, transportation to get the fuel out of the area was also interrupted for quite a time. This cause a transient but serious shortage of fuel
use both the economic perspective and the scientific method. If someone produced too much of a good, this would suggest: The good was produced to the point where its marginal benefit exceeded its .
Economists use the term "demand" to refer to a schedule of various combinations of market prices and amounts demanded The relationship between quantity supplied and price is _____ and the relationship betweenquantity demanded and price is _____.
Economists use the term demand to refer to a schedule of various combinations of market prices and amounts demanded. Sep 15, · Economists use the term demand to refer to: A) a particular price-quantity combination on a stable demand curve. B) the total amount spent on a particular commodity over a stipulated time period. C) an upsloping line on a graph that relates consumer purchases and product obidytfp.cf: Resolved.
View Homework Help - Economics_28 from ECON at Howard University. Chapter 2 Key 1. Economists use the term demand to refer to: A. a particular price-quantity combination on a demand %(1). In other words, the quantity demanded and price are inversely related. Demand curves are drawn as 'downard sloping' due to this inverse relationship between price and quantity demanded. Price Elasticity of Demand: The price elasticity of demand represents .