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Explain how a reduction in income tax could affect both aggregate demand and aggregate supply in an economy

The graphs I made unfortunately aren't copy/pasting here unfortunately but I can redraw them on the whiteboard. Income tax is a tax levied on consumer income, collected by the government. Aggregate demand is...
MH
Answered by Mariam H. • Economics tutor
40708 Views

Describe why excess profits can't be made in a competitively perfect market.

An example introduction to an essay question would be: Under perfect competiton we make the follwing assumptions: Homogoenous products. There are many buyers and sellers and each one is so small that no indi...
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Answered by Hasan E. • Economics tutor
2290 Views

What are positive externalities of consumption? Explain with a diagram and give an example.

Externalities are effects that occur, due to a transaction, on third parties (people who were not involved in the original transaction). Hence, positive externalities of consumption are produced when the con...
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Answered by Joseph C. • Economics tutor
15301 Views

If monopolies are so inefficient, why do they still exist?

There are a few reasons for which monopolies are, in certain cases, both desirable and beneficial. The first case to consider is that of a natural monopoly, which benefits from Economies of Scale (show the l...
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Answered by Anna Z. • Economics tutor
3044 Views

Explain why scarcity results in economic decisions being made.

The concept of scarcity acknowledges that resources in an economy are finite to produce a certain number of goods and services but that individuals needs and wants are unlimited. This results in economic dec...
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Answered by Naqib R. • Economics tutor
2427 Views