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In micro-economics, why is a demand curve downwards sloping?

A downwards sloping demand curve in a supply and demand diagram for micro-economics sits on a X axis named quantity and Y axis named price. The demand curve is linear and slops downwards start from Q=0 and P...
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Answered by Hugh B. • Economics tutor
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Evaluate the view that fiscal policy is the most effective way of achieving long-term economic growth

Definition of:Long-term economic growth - the sustained increase in output in an economy measured by an increase in real GDP over a period of timeFiscal policy - it is the use of government expenditure and t...
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Explain price elasticity of demand and how this may impact government taxation

In economics goods/services usually have either elastic or inelastic elasticities of demand. Elastic demand means that a change in price results in a proportionally larger change in quantity demanded, which ...
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Answered by Isobel W. • Economics tutor
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Using a diagram, show how a polluting factory may cause a negative externality to society, and how a tax might be used to solve this market failure.

The first thing to do in this question is to make sure to define the terms. A negative externality is the negative unintended spill-over effects of an economic activity. In this case, when the factory produc...
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Answered by Aurora M. • Economics tutor
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Show how an decrease in income tax will close a deflationary gap

Initially the economy is in equilibrium where AD=SRAS and real output y1 is produced at P. A deflationary gap is when potential output is below real output so as this is the case we have a deflationary gap. ...
Answered by • Economics tutor
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