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ECONOMIC POLICIES: Government actions designed to affect economic activity and pursue one or more economic goals. Also called economic policies. The four common types of government policies are: fiscal, monetary, regulatory, and judicial.
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Lesson 7: Market Equilibrium | Unit 5: The Method
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Page: 21 of 22
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Inefficient use of resources can result from:- The fourth rule of competition-with less competition buyers or sellers control the price. The quantity is too little and the demand price is greater than the supply price.
- The seventh rule of complexity-costs or benefits external to the market (externalities) cause differences between the value of goods produced and goods not produced, even though market demand and supply prices are equal.
- The fifth rule of imperfection-markets are not perfect.
- Scarcity implies the lack of competition.
- Complexity implies externalities.
Efficiency is a goal, not a perpetual state of the world.
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ALLOCATION EFFECT A change in the allocation of resources caused by placing taxes on economic activity. By creating disincentives to produce, consume, or exchange, taxes generally alter resource allocations. The allocation effect is typically used when governments seek to discourage the production, consumption, or exchange of particular goods or activities that are deemed undesirable (such as tobacco use or pollution). This is one of two effects of taxation. The other (primary) is the revenue effect, which is the generation of revenue used to finance government operations.
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PINK FADFLY
[What's This?]
Today, you are likely to spend a great deal of time watching infomercials wanting to buy either a pair of red goulashes with shiny buckles or a handcrafted bird feeder. Be on the lookout for telephone calls from former employers.
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The 22.6% decline in stock prices on October 19, 1987 was larger than the infamous 12.8% decline on October 29, 1929.
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"If I have ever made any valuable discoveries, it has been owing more to patient attention than to any other talent. " -- Isaac Newton, mathematician, physicist
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EMA
Econometrica
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