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Graph on paper. When the Government sets a price floor (ie a price below which a good cant be sold) new suppliers will want to enter the market. However, if the price floor is above the equilibrium point (if...

Price elasticity of demand is defined as the proportional change in demand to a change in price. If the response in demand is more than proportional to the price change, demand is elastic. A less than propor...

The difference between Micro and Macroeconomics is simple to understand and the hint is in the name! Microeconomics is the study of economics on a 'small' level: at an individual, firm and market level. This...

Evaluating fiscal policy: Opportunity cost - relevant for spending decisions e.g. high spending on welfare benefits reduces budget available for other government services e.g. healthcare, the decision of how...

Opportunity cost is defined as the next best alternative foregone. An example of this is: Someone gives up going to see a movie to study for a test in order to get a good grade. The opportunity cost is the c...