Top answers

What is the basic economic problem?

To answer this question, one must take into account the varying schools of thought which exist in economics (neoclassical, Keynesian, Marxian, behavioural, feminist etc.). However, for GCSE and A-level Econo...
JL
8414 Views

Why can firms in a perfectly competitive market only achieve normal profits in the long run?

Normal profit is the minimum level of profit required to maintain a firm's factors of production in their present use. It is measured by the opportunity cost of using them. Supernormal profit is any addition...
WE
Answered by William E. • Economics tutor
3131 Views

The price of tea in the UK increased from £7.20 per kilo to £8.48 per kilo. Over the same period the quantity of tea purchased fell from 97 million kilos to 76 million kilos. Calculate the price elasticity of demand for tea.

Price elasticity of demand = change in demand / change in price change in price = 7.20 --> 8.48 = 17.78% increasechange in demand = 97 million --> 76 million kilos = 21.6% decrease therefore PED = -21....
WH
Answered by William H. • Economics tutor
3226 Views

What is the basic Economic problem, and how does Economics as a discipline approach this?

The basic economic problem is usually defined as there being a situation of scarce resources but an unlimited or infinite number of wants and demands for these resources. Economics as a discipline seeks to a...
AM
3042 Views

Why do rising house prices cause an increase in aggregate demand?

An increase in house prices will increase the wealth of house owners. Knowing that their asset is worth more, house owners will have more confidence to borrow, spend and take risks, this is known as the weal...
AH
Answered by Arthur H. • Economics tutor
12885 Views