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IMPLICIT COLLUSION: Seemingly independent, but parallel actions among competing firms (mostly oligopolistic firms) in an industry that achieve higher prices and profits, much as if guided by an explicit collusion agreement. Also termed tacit collusion, the distinguishing feature of implicit collusion is the lack of any explicit agreement. They key is that each firm seems to be acting independently, perhaps each responding to the same market conditions, but the end result is the same as an explicit agreement. This should be contrasted with explicit or overt collusion that does involve a formal, explicit agreement.
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Lesson 11: Circular Flow | Unit 1: Basic Flow
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Page: 6 of 22
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- The circular flow model, which is the continuous production and consumption interaction among the four major sectors-household, business, government, and foreign-- that takes place through the three aggregated macroeconomic markets--product, factor and financial.
- The basic role of the sectors--household, business, government and foreign--of the economy.
- The three aggregated markets: (a) Product markets: All markets in the economy that exchange final goods and services. (b) Factor markets: All markets that exchanges the services of the economy's labor resources. (c) Financial markets: All markets that trade financial instruments.
- The physical flow, which is the counter-clockwise flow of resources from the household to the business sector and of production from the business to the household sector.
- The payment flow, which is the clockwise flow of payment for resources purchased by the business from the household sector and of payment for production purchased by the household to the business sector.
- The continuous circular flow of payments: GDP used for factor payments, which becomes national income, which is used for consumption to buy GDP.
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RISK POOLING The process of combining the risks facing individuals into larger groups. This process can be used effectively to transfer individual risks to the entire group. This makes it possible to calculated the risk for the group. Risk pooling is the standard technique that enables the provision of insurance services.
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BLUE PLACIDOLA
[What's This?]
Today, you are likely to spend a great deal of time browsing through a long list of dot com websites hoping to buy either pink cotton balls or a genuine down-filled comforter. Be on the lookout for broken fingernail clippers.
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This isn't me! What am I?
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More money is spent on gardening than on any other hobby.
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"If you don't have time to do it right, when will you have time to do it over?" -- John Wooden, Basketball coach
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OOB
Opening of Business
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