History and Significance of Mercantilism
Significance of mercantilism
Mercantilism believes in a zero-plus policy, where trade benefits one country and harms another. Buzzle helps us understand what mercantilism is, with the help of its definition, history, and significance.
The Concept of Adverse Selection Explained
Concept of adverse selection with example
Adverse selection can be defined as a phenomenon in the market, that arises due to asymmetric information between buyers and sellers, which leads to a loss for either of the two. Buzzle explains more about this concept with some...
Economic Factors Affecting Business
Economic factors affecting business
Both international and domestic businesses are often affected by the dynamic economic conditions prevalent in the market. Factors like demand and supply, interest rates, recession, inflation, etc. often have an impact on the...
Classical Economics Vs. Keynesian Economics
Classical economics
Should the government influence the economy or stay away from it? Should economic policy be focused on long term results or short term problems? Many such beliefs form the difference between the two major schools of thought in...
Four Stages of a Business Cycle
Stages of a business cycle
Like everything in this world, business too has to follow a life cycle. Time happens to be one of the major factors that plays an important role in the life cycle of a business.
Giffen's Goods Examples
Giffen's goods
Giffen's paradox is one of the most interesting economic phenomena. A Giffen's good is a product that seems to defy the established conventions as dictated by the law of demand.
Difference Between Scarcity and Shortage in Economics
Difference between scarcity and shortage in economics
In economics, 'scarcity' and 'shortage' have different meanings. Almost all resources are scarce, since man does not have the ability to create natural resources. On the other hand, shortage of any resource can be created by man,...
Things You Should Know about Reaganomics
Fact about Reaganomics
The economic policies of President Reagan are popularly referred to as Reaganomics― policies that dramatically affected the American economy in the 1980s.
Zero-sum Game Explained with Examples
Zero-sum game rules
A 'Zero-sum Game' is a situation wherein any gain of a person is offset by an equivalent loss of another person. Buzzle explains this concept in 'Game Theory', with the help of examples.
How to Solve the Equation for Profit (With Examples)
Equation for profit
Making profits being the main goal of any business, assigns it a vital position in the field of economics. No business will run successfully without profit. Here's a Buzzle extract that explains with examples, how to solve the...
Understanding Excess Capacity with Examples
Example of excess capacity
In simple terms, excess capacity is the situation where there is more capacity to produce than the requirement, and there are idle resources. When does excess capacity occur? This post helps you understand the concept better.
What is Consumer Sovereignty?
What is consumer sovereignty
Consumer sovereignty refers to that market where production of goods and services is as per the wish and whims of the consumers. Consumers reign over the market, since only those goods are produced that appeal to them. Sellers have...
Understanding the Crowding Out Effect in Economics
Crowding out effect in economics
'Crowding out' in economics is an impact of an increase in the government borrowing, which further leads to an increase in interest rates, making it difficult for the private sector to borrow from the market.
Summary of David Ricardo's Iron Law of Wages
David Ricardo's Iron Law of Wages
One of the most popular and respected economists of his time, David Ricardo's Iron Law of Wages remains one of his most well-known arguments. Buzzle gives you a summary of his argument in this post.
Understanding Government Monopoly with Examples
Government monopoly meaning
A government monopoly has the advantage of offering essential services at a low cost. This Buzzle post helps you understand better what a government monopoly actually is, with the help of a few examples.
Meaning of Substitute and Complementary Goods in Economics With Examples
Substitute and complementary goods examples
Substitutes are those goods that serve the same purpose as the original and can be used as an alternative. On the other hand, complementary goods are two or more distinct items or goods whose use is associated or interrelated with...
Brief History of Laissez-faire Capitalism
James Wilson founded The Economist, voice of Laissez-faire capitalism
An economy without government interference, where individuals are free to trade, defines the system of laissez-faire capitalism. Buzzle gives you a brief overview of the history of this economic system, which emerged around the...
Understanding the Endowment Effect in Economics With Examples
Endowment effect in economics
In the field of behavioral economics, a fairly interesting phenomena is the 'endowment effect', which states that once you own a thing, you tend to value it much more than its actual value. In this Buzzle post, we will give you a...
Recessionary Gap: Causes, Effects, and Potential Solutions
Recessionary Gap meaning
A recessionary gap occurs when the actual GDP (gross domestic product) is lesser than the GDP at full employment. The Buzzle article below outlines the definition of a recessionary gap along with its causes, effects, and potential...
Understanding the Principle of Factor Sparsity with Examples
Principle of factor sparsity example
Used for optimizing the efforts put in by an entity and accomplishing more in shorter periods of time, the principle of factor sparsity is important in every facet of human life and occupation management. In this article, we will...
What Does Reservation Price Mean in Economics?
Meaning of reservation price in economics
In economics, reservation price is the price at which the buyer is willing to purchase or the seller is willing to sell. The buyer will not accept a price above that amount, and the seller will not sell his product for less than...
The Theory of Bounded Rationality Explained
Theory of bounded rationality
Till what extent can human beings take logical and rational decisions? Our decisions are prone to many factors, and it is highly impossible for any human to behave rational in all circumstances. The 'Theory of Bounded Rationality'...
A Brief Insight into the Concept of Protective Tariff
Concept of protective tariff
Protective tariff is a type of tariff that is imposed on imported goods to increase domestic economy. A brief insight into the concept of protective tariff is provided in the Buzzle write-up below.
Difference Between Consumer Surplus and Producer Surplus
Fact about consumer surplus and producer surplus
Consumer surplus and producer surplus are excess amounts that remain after a product is bought or sold for an unexpectedly less or more price, respectively. Buzzle highlights the difference between consumer surplus and producer...
What is the Law of Increasing Opportunity Cost in Economics?
Law of increasing opportunity cost in economics
Opportunity cost is something that is foregone to choose one alternative over the other. Similarly, with scarce resources, when you decide to increase the production of certain goods over a specific limit, you need to compensate...
What is Meant by Economic Nationalism?
Economic nationalism meaning
Economic nationalism, very simply stated, is the imposition of economy control to protect the nation. Buzzle will tell what is meant by economic nationalism.
How to Calculate the Herfindahl-Hirschman Index (HHI)
Herfindahl-Hirschman Index (HHI) formula
The Herfindahl-Hirschman Index (HHI) is a measure of the competition between firms and related industries. Buzzle will tell you how to calculate the Herfindahl-Hirschman Index (HHI).
The Concept of Budget Constraint Explained with Examples
Concept of budget constraint
A budget constraint is a representation of the quantities and prices of various goods that can be purchased within a specified budget. Buzzle explores the concept of budget constraint with examples.
Advantages and Disadvantages of Deficit Spending
Pros and cons of deficit spending
In layman's terms, deficit spending occurs when spending exceeds income. The following Buzzle article enlists the advantages and disadvantages of deficit spending.
Understanding the Concept of Deficit Spending with Examples
Concept of deficit spending
Deficit spending occurs when the expenses incurred are more than the receipts. It is usually associated with the government's policies regarding spending of economic resources. This Buzzle article will help you understand the...
What does Fiscal Responsibility Mean?
Fiscal responsibility meaning
Fiscal responsibility is a term related to government spending and taxation. The Buzzle article below will elaborate on what fiscal responsibility actually means.
5 Examples of The Law of Diminishing Returns
Example of the law of diminishing returns
The law of diminishing returns states that a production output has a diminishing increase due to the increase in one input while the other inputs remain fixed. Buzzle, here, explores 5 examples of the law of diminishing returns.
Pros and Cons of Using Expansionary and Contractionary Fiscal Policy
Pros and cons of using expansionary and contractionary fiscal policy
Expansionary and contractionary fiscal policies raise and lower money supply, respectively, into the economy. In this Buzzle article, you will come across the pros and cons of using expansionary and contractionary fiscal policy.
Difference Between Absolute and Comparative Advantage
Difference between absolute and comparative advantage
This Buzzle article will explain the difference between absolute and comparative advantage, both of which are important principles related to international trade.
How to Calculate Cost of Goods Sold
Formula to calculate cost of goods sold
Cost of goods sold (COGS) is the cost of all the goods produced that were sold to the consumers. This Buzzle article will tell you how to calculate cost of goods sold.
How to Calculate Degree of Operating Leverage
Formula to calculate degree of operating leverage
Simply put, operating leverage is the ratio of the fixed costs of a company to its variable costs. In this Buzzle article, you will understand how to calculate degree of operating leverage, and the importance of this ratio in...
Keynesian Economics Vs. Hayek Economics
Comparison between Keynesian economics and Hayek economics
Keynesian and Hayek economics are theories proposed by two stalwart economists of the 20th century. In this Buzzle article, you will come across a Keynesian vs. Hayek economics comparison chart, which will highlight the difference...
How to Calculate Operating Profit Margin
Calculate operating profit margin
In very simple terms, operating profit margin is the profit that any business earns from its activities (operations). In this Buzzle article, you will learn how to calculate operating profit margin.
How to Calculate Opportunity Cost
If you've survived the theory part of opportunity cost, you must be wondering how to calculate opportunity cost. Well, all you need is to have the cost of your selected item and the cost of its next best alternative ready. Read...
List of Economic Problems
In the modern world, common man often faces certain financial losses directly, as a result of the problems facing the national economy. Here, a list of economic problems that tend to affect people and the economy has been provided.
What are Externalized Costs
An important factor of consideration in modern economics is externalized cost. Here's a brief explanation.
Gold Standard
The gold standard has been one of the most important monetary systems, that was used by various countries around the world. In this article, we will take a look at what exactly is the gold standard and its evolution.
Comparing Max Weber's and Karl Marx's Theories
This article aims at comparing Max Weber's and Karl Marx's theories to highlight differences in their approach to capitalism.
Why Economic Models Fail?
If only hypothetical projections translated into reality, world economy would have heaved a sigh of immense relief. The inaccuracy of economic models is a serious problem in our world today. Let us investigate the causes.
Types of Auctions
Selling of goods and services through auctioning can be dated back to 500 BC. Though initially uncommon, this practice has gained significant popularity, resulting in the development of various kinds of auctions...
Pros and Cons of Barter System
Barter system is the ancestor of all forms of commercial and economic exchange activities. Let's get to know this form of exchange in a little more detail and get acquainted with the various pros and cons of barter system.
Bertrand Competition
Bertrand's competition is an economic theory, which indicates how two firms will compete in a duopoly market, using 'price' as a weapon.
What is Quantitative Easing
Quantitative easing is often considered the "last resort" monetary policy to revive the economy when all other policy interventions have failed to stimulate growth. Let's try to understand quantitative easing in detail.
What is Distributive Justice
The theory of Distributive Justice deals with the distribution of 'equal material goods and services' to all the members of the society.
Winner's Curse Explained
Wanting to know what is the 'winner's curse'? It is something that you might have observed in several auctions. The following Buzzle article will discuss the same in detail.
Sunk Cost Dilemma
Sunk cost dilemma is a situation where in one is not able to decide whether to or not to continue a project or a deal, considering its uncertain outcome, when an individual has already invested in some resources.
What is a Selective Default
The term 'Selective Default' is quite intriguing. What does it actually mean? The following article discusses selective default and its implications.
Current Account Vs. Capital Account
Current accounts and capital accounts are two important concepts in the field of macroeconomics and international finance. In this article, we shall understand the difference between current accounts and capital accounts in detail.
Fiscal Policy Tools
In this article, we shall try to understand the basic concept of fiscal policy, its tools and objectives in detail.
Bartering in Daily Life
Barter economy has been in existence in many past cultures. Even in this age of the Internet and money-based economy, some people and cultures practice bartering system.
Examples of Capital Goods
Having a tough time trying to figure out what capital goods are? Going through some examples of the same will help you get well-versed with the concept.
What is Average Total Cost?
This article explains the concept of average total cost, its significance, and the way it is calculated. Read on to know more.
What is Marginal Benefit
What exactly is marginal benefit and how does it affect our choices? How is it calculated? Read to know all about it.
Welfare Economics
What is welfare economics? Is it practical or does it draw a hypothetical economic picture? Let's find out what exactly it is all about.
Perfectly Inelastic Supply
This article will give you some basic information about perfectly inelastic supply, and what it means from the point of view of a seller.
What is Comparative Advantage?
Absolute and comparative advantage are two of the introductory topics of international economics. What is comparative advantage is what you are going to find out in detail from the following article.
Purchasing Power Parity
Those of you struggling with the concept of foreign exchange must have wondered what determines the exchange rate between two currencies. Purchasing power parity is a theory that is highly relevant in explaining this phenomenon.
Marginal Product of Labor
As the word 'marginal' suggests, marginal product of labor is a theory that measures the productivity of extra units in an organization. Let us take a look at the topic in detail...
Diseconomies of Scale
Diseconomies of scale is a rare condition in large business when the average cost of producing one unit of material increases. It is contrary to the theory of economies of scale, which lays emphasis on having large organizations.
Perfectly Inelastic Demand
What is perfectly inelastic demand? How is it identified? What type of goods and the demand for them present typical examples of this economic phenomenon? Read the following article to find out.
What is Stagflation?
No nation would like to find itself in an economic situation that represents slow or negative growth and high prices. In this article, we have explained this condition known as 'stagflation'.
Law of Diminishing Returns
The law of diminishing returns is important in the field of economics and also in our daily life. Learn about the law in this article.
What is Price Gouging?
In the free world, where markets are free, a price gouging action or effect comes into being. Such an effect is universally present and is observed in almost all types of markets. Keep reading to know more...
Opportunity Cost Examples
What theoretical pedagogy can't drive in, practical examples do! Here are some interesting opportunity cost examples that would definitely strengthen your grip on this simple yet rational economic concept!
What is Opportunity Cost?
If economics sends you in a quizzical tailspin and you're currently scratching your head over what is opportunity cost, here's all you need to know about this economic concept.
What is Economic Rent?
Have you heard of a concept called economic rent? No? Well, this article will familiarize you with this important economic theory.
Understanding the Concept of Marginal Revenue Product
What is marginal revenue product (MRP)? How is it calculated? If you are looking for an answer to these questions, this article will surely be an insightful read.
Market Structure
In this article, you will find everything you want to know about the concept of market structure, its types, and comparisons.
Benefits of Free Trade
A concise write-up on the benefits of free trade policy, which are often put forth by its advocates in a bid to promote it.
What is Pure Competition?
Any given market has three dimensions, namely, a buyer, seller, and price of the product. Pure competition is a theory in which market conditions are hypothetical. Read ahead to know more...
What is Economics?
Understanding economics is not just understanding how money flows in today's world; the scope of the science is much larger than that. Read on to know more...
What is Economic Growth
You may not know how economic growth affects you, or what it is for that matter, which isn't surprising, as we seldom take interest in things which don't affect us directly―not even when they affect us indirectly.
Paradox of Thrift
An economic concept popularized by John M. Keynes in the 20th century, the 'paradox of thrift' or 'paradox of saving' has an uncanny resemblance to the current condition of the US economy.
Centrally Planned Economy
If you want to understand properly, the concept of a centrally planned economy, then read this article.
Economic Equilibrium
A concise write-up on the basics of economic equilibrium, with reference to its definition, benefits, and various factors that lead to its disruption.
Price Ceiling Explained
Since ages, governments and people in power have tried to control the prices of commodities by enforcing price ceilings. Such controls, which are intended to benefit certain sections of society do not provide the intended benefit,...
What is Average Variable Cost
In this article, we show you how to find average variable cost, with the help of standard formulas. Also, the difference between fixed and variable cost is explained.
What is Average Fixed Cost
This article aims at explaining the formula for average fixed cost clearly. Continue reading to know all about it.
Total Variable Cost
If you've just had your first brush with economics and cost accounting, you must have come across the term 'Total Variable Cost'. Wondering what it is? Well, read ahead to find out.
Historical Periods of Deflation
Deflation can be a nemesis to any economy due to its crippling effect. Let's look at some major historical periods of deflation to be able to draw lessons from our past and the actions that caused the damage.
Open Market Operations
In the United States, the concept of open market operation revolves around buying and selling of US government securities issued by the Federal Reserve System―the central bank of the country.
What is Marginal Propensity to Consume
The marginal propensity to consume is a pretty important part of the Keynesian theory, which a lot of Economics students need to learn. Here's an article about the same.
Marginal Rate of Substitution
Economists and producers use a theoretical tool called the Marginal Rate of Substitution to understand the actions of consumers who have to often choose between different products with their limited resources. This article attempts...
Microeconomics Vs. Macroeconomics
Understanding the difference between microeconomics and macroeconomics is one of the basics of economic studies.
Monetary Policy Vs. Fiscal Policy
Monetary and fiscal policies are two parallel concepts that are used by governments all across the world as welfare and reform measures. One of the basic difference is that, fiscal policy is usually decided by the national...
Law of Demand
The law of demand defines one of the most important relationships in economics. The relationship between demand and pricing is of a deep interest for economists. Here's more...
Diminishing Marginal Utility
The field of microeconomics, often concentrates on human psychology and behavior of mankind regarding consumption and spending. Diminishing marginal utility, is one such excellent hypothesis and conception, that is applicable to a...
Demand and Supply Analysis
In the discipline of economics, there are several different types of analysis theories that have been put down by several different economists. The demand and supply analysis is useful for companies and small businesses to...
Keynesian Economics
Is Keynesian economics, which was used by John M. Keynes to explain why the Great Depression occurred, still as relevant as it was back then?
Home Economics Degree Programs Attracting More Male Students
The educational pursuit of home economics is attracting male students in record numbers. How and why this is happening, is what we'll check out in this write-up.
The eBay Effect―At Home Economics 101
eBay has redefined how we buy and sell things. It also represents the ebb and flow of demand and buying power in the American public. Forget pricing guides and financial news; eBay tells us everything we need to know.
Principle of Economics
Economics is a social science and like other sciences, it has its own principles or laws. Here, we have tried to explain the basic assumptions and broad theories when it comes to formulating these principles.
Monetary Policy
Monetary policy is the process to manage the supply of money in such a way, that specific goals such as price stability, employment, etc., are achieved. A central bank's measures to influence short-term interest rates and the...