Economics

Definition: Socialism or Socialistic Economy is an economic system wherein the whole society owns the factors of production, and its operation is in the hands of public authority. Here, the government takes major economic decisions taking into account the overall well-being of the society. Hence, all areas of the economy, be it industry, agriculture, transport or business, are … [Read more...] about Socialism

Definition: Bandwagon Effect implies a psychological fact wherein people adopt or do something because most of the people are doing it. In doing so, they keep aside their own beliefs. They do so to become part of the group. It affects an individual's spending and investing decisions. Important: You might be wondering what happens due to this effect. Well, it affects various … [Read more...] about Bandwagon Effect

Definition: When there is an inefficient allocation of goods and services in a free market, such a situation is termed a market failure. It arises when the market fails to efficiently create and distribute scarce resources. Here the term 'efficiently' means the way in which the highest social welfare can be achieved. In a free market, the demand and supply forces, determine … [Read more...] about Market Failure

Definition: Circular flow of Income refers to the movement of money and goods, in the economy, across the various sectors, i.e. household, firm, government and foreign sector, in a circular flow. An economy can be defined as a unified arrangement of production, distribution, exchange, consumption and investment. These processes play a crucial role in the survival and … [Read more...] about Circular Flow of Income

Definition: The term 'cartel' refers to an arrangement wherein two or more large producer firms comes together, to regulate the supply of the goods and services with the aim of manipulating the prices. And to do so, the producers agree to cooperate with one another, with which they can limit competition and dominate the entire market. It is also termed as price rings. It is … [Read more...] about Cartel

Definition: Macroeconomics refers to the field of study in Economics in which we learn about those factors which have an impact on the entire economy, as well as how these factors interact in the economy. It talks about broad economic issues such as full employment or unemployment, high or low rate of growth, policies on money supply, inflation or deflation, government … [Read more...] about Macroeconomics

Definition: Microeconomics is a subfield of economics which focuses on analysing the behaviour of economic agents within an economy so as to make decisions concerning the allocation of limited resources which have multiple uses. As the name suggests, it is the microscopic view of the economy, wherein the economic activity of small individual units and their decisions related … [Read more...] about Microeconomics

Definition: Public Finance implies a branch of economics, which is concerned with government activities and the various sources of financing expenditure. Basically, it deals with government revenue, expenses, and debt, as well as its impact on the entire economy. As its name suggests, public finance is all about the management of finances of the public authorities or public … [Read more...] about Public Finance

Definition: Economies of Scale can be understood as the proportionate reduction in the cost achieved by increasing the scale of production or expansion in the size of the plant, often gauged by the quantity of output produced, wherein the per unit cost of output decreases with the increasing level of production. Therefore, when there is a fall in the long run average cost of … [Read more...] about Economies of Scale

Definition: In economics, factors of production, as the name signifies are the inputs or say resources acquired by the firm to use them in the production of goods or services, so as to earn a profit. The word 'production' refers to a systematic process of converting the inputs, into finished products, which can be goods or services. For this purpose, the product has to pass … [Read more...] about Factors of Production