by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What Affects Supply? Supply is made up of what producers bring into the market for consumers to purchase. As such, numerous factor can affect the supply or amount of production. The factors of production known to shift the supply curve include: Production costs...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What Factors Affect Demand? The following factors often affect the demand for a product: Taste Shift Change in Population Change in Income Change in Price of Substitute Goods Change in Price of Complementary Goods Future Expectations of Financial Position A change in...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Substitution Effect? The typical response to higher prices is that a person chooses to consume less of the product with the higher price. This occurs for two reasons, and both effects can occur simultaneously. The substitution effect occurs when a price...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is a Budget Constraint? A budget constraint indicates all the combinations that a consumer can purchase given the price of the goods and the amount of funds (budget). Generally, this means choosing some combination that that meets the consumers needs optimally...
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is Utility? Utility means use or usefulness. In economics, utility regards the extent to which a good or service satisfies a consumer’s need or want. It can be thought of as a measure of satisfaction.
by TheBusinessProfessor | Feb 23, 2025 | Economic Analysis & Monetary Policy
What is the Law of Diminishing Returns? The law of diminishing returns is the premise that additional units of a given resources may initially provide greater benefit; but, eventually the benefit provided by each additional unit will decline until it reaches zero (or...
