Three Questions every economic system

Economic Systems Each point along the economy’s production possibilities frontier is an efficient combination of outputs. Whether the econo...

Disequilibrium the price

Disequilibrium A surplus exerts downward pressure on the price, and a shortage exerts upward pressure. Markets, however, don’t always reach...

Changes in equilibrium price and quantity

Equilibrium occurs when the intentions of demanders and suppliers exactly match. Once a market reaches equilibrium, that price and quantity...

Demand and supply create a market

Demanders and suppliers have different views of price. Demanders pay the price and suppliers receive it. Thus, a higher price is bad news f...

Shifts of the supply curve

The supply curve isolates the relation between the price of a good and the quantity supplied, other things constant. Assumed constant along...

The supply schedule and supply curve

Supply Just as demand is a relation between price and quantity demanded, supply is a relation between price and quantity supplied. Supply i...

Shifts of the demand curve

A demand curve isolates the relation between the price of a good and quantity demanded when other factors that could affect demand remain u...

Tax principles and tax incidence

The structure of a tax is often justified on the basis of one of two general principles. First, a tax could relate to the individual’s abil...