Category: Economics
Resale price maintenance.
Resale price maintenance. This is where the producer (manufacturer) fixes the price of a commodity at which the seller (retailers) have to sell to the ... Read More
Methods of Price determination in the Market
Haggling (Bargaining). This is where the buyer negotiates with the seller for the suitable price of the during bargaining, the buyer keeps on reducing the ... Read More
Types of Markets
Competitive (Perfect) market. This is a market where buyers and sellers have no ability to influence the price in the Prices are determined by ... Read More
Future (Forward) market.
Future (Forward) market. This is a market where commodities are traded for future Read More
Spot market
The spot market is where financial instruments, such as commodities, currencies, and securities, are traded for immediate delivery Read More
Characteristics/Features of competitive market
Large numbers of buyers and sellers in the market. Identical/homogenous products sold by all firms, the freedom of entry into and exit out of the ... Read More
Competitive (Perfect) market.
Competitive (Perfect) market. This is a market where buyers and sellers have no ability to influence the price in the Prices are determined by ... Read More
Chapter 1: Introduction to economics
Definition of economics Economics is concerned use of scarce resources to satisfy human endless needs. It deals with the ways in which production, distribution and ... Read More
Mixed economy
This is an economic system where the productive resources are owned, controlled and allocated by both the government and private individuals. Decision making and planning ... Read More
Command (Planned /centralized) Economy
This is an economic system where the resources are owned, controlled and allocated by the government (state) on behalf of its citizens. Planning and major ... Read More
Advantages (merits) free market economy
It provides a society with the right goods or services at the right time due to competition A market economy promotes entrepreneurship; because the emphasis ... Read More
Feature (Characteristics) of a Market Economy
There is private ownership and allocation of resources Freedom of entry and exit in economic activities There is perfect competition among firms Producers aim at ... Read More
Market (Free enterprise/Laissez fair) Economy
This is an economic system where productive resources are owned, controlled and allocated by private individuals without government intervention. Resources are allocated by forces of ... Read More
Limitations of the concept of opportunity cost
Some factors of production are specific in that they cannot be put to alternative uses. It is not applicable where costs and benefits cannot be ... Read More
Some uses (importance/applications) of the concept of opportunity cost
It helps the producer in allocation of resources. That is, determining what to produce, when produce, how to produce, where to produce and for whom ... Read More
Basic (fundamental) economic problems (principles)
There are three fundamental economic problems (principles). These include scarcity, choice and opportunity cost Scarcity. This refers to limited supply of resources required to produce ... Read More
Types of Goods in economics
(a) Consumer goods; these are goods meant for final consumption. They do not involve wore processing. For example food stuffs, books, clothes, etc. . (b) ... Read More
The fundamental economic questions
The economic questions influence resource allocation. They include; When to produce? That is, the period or season of production, whether to produce now or in ... Read More
Economic wants
Economic wants are desires that can be satisfied by consuming a good, service, or leisure activity. For example food, shelter, security etc. Read More
Definition of economics
Economics is concerned use of scarce resources to satisfy human endless needs. It deals with the ways in which production, distribution and consumption of goods ... Read More
Characteristics of wants
They are recurrent (endless) They are competitive in nature They are dynamic, that is, they keep on changing from time to time Read More
Characteristic of Wealth
1 It is relatively scarce. That is, it is limited in supply, It provides satisfaction (utility) It has money value. That is, it has price. ... Read More
Normative economics
Normative economics is subjective and value based, that is what people think the world would have been. Having a belief that the income should be ... Read More
Positive economics
Positive economics is objective, fact based and concerned with what the world was, is and will be. For instance the statements; "An increase in taxation ... Read More
What is meant by public revenue?
Public revenue is government or state income from any/all sources Read More
Non-tariff barriers to trade
Quotas Licensing Total bans/embargo Quality control requirements Devaluation Direct administrative control Read More
Reasons for minimum wage legislation in your country
to protect workers against unduly low pay To minimize brain drainage To reduce work’s unrest To reduce wage fluctuation To encourage labour mobility To motivate ... Read More
What is meant by minimum wage legislation in your country?
A minimum wage is the minimum amount of remuneration that an employer is required to pay wage earners for the work performed during a given ... Read More
Factors limiting agricultural mechanization in LDCs
Limited capital Insufficient skills Poor infrastructure High level of conservation Insecurity in some area Misuse of equipment Storage bottleneck Inappropriate land tenure system Read More
Roles of intermediate technology
exploitation of idle resources creation of linkages in production development of skills reduction of foreign dependence rural development fair income distribution increase in production Read More
Agents of production in your country
Labour Land Capital Entrepreneurship organization Read More
Define the term “production”
Production is a process of transforming raw materials into forms that yield satisfaction at particular time to the customer at a convenient place. Read More
Giffen good
A Giffen good is a low income, non-luxury product that defies standard economic and consumer demand theory. Demand for Giffen goods rises when the price rises ... Read More
Distinguish/differentiate between custom Union and Common Market
Custom union is when member countries abolish all tariffs among themselves and adopt a common external tariff policy against nonmember countries. Common market is when ... Read More
Common market
Common market is when member countries abolish all tariffs among themselves, adopt a common external tariff policy against nonmember countries and there is free movement ... Read More
Custom union
Custom union is when member countries abolish all tariffs among themselves and adopt a common external tariff policy against nonmember countries. Read More
Differentiate between Preferential Trade Area and Free trade area
Preferential Trade Area occurs when countries reduce tariffs among themselves and leaving those tariffs for nonmember countries as they are. A free trade area is a ... Read More
Preferential Trade Area
Preferential Trade Area occurs when countries reduce tariffs among themselves while charging higher tariffs for nonmember countries. Read More
The policies that a country should adopt to close/eliminate an inflationary gap
Decrease aggregate demand or increase supply through Reducing government expenditure for example cutting down wages and salaries paid to workers Encouraging investors as a way ... Read More
The policies that a country should adopt to close a deflationary gap
Fiscal policy: the government should reduce taxes on people’s personal income so that they are left with enough disposable income to spend. The government should ... Read More
What measures should be taken to curb unemployment in an economy
Ensuring political stability and crime reduction; encourages investment and job creation. Improvement of infrastructure; several roads are being constructed and renovated to encourage investment and ... Read More
What are the limitations of the marginal productivity theory of distribution in determination of wages?
The theory assumes that there is no government interference, but government usually interferers in wage determination The theory assumes the law of diminishing returns, but ... Read More
Explain the marginal product theory of distribution as applied to labour.
The marginal productivity theory of distribution emphasizes that a worker should be paid a wage which is equal the value of its marginal product Or ... Read More
Problems of an external debt
Encourage over dependence It has high administrative costs Worsen the country’s BOP position Limited capital accumulation due to reduced expenditure on capital goods. Affects the ... Read More
External debt
External debt is the money that the central government owes to foreign governments and external agencies. Read More
Internal debt or domestic debt
In public finance, internal debt or domestic debt is the component of the total government debt in a country that is owed to lenders within the ... Read More
Flexible, managed or floating exchange rate
Flexible ,managed or floating exchange rate is is where the rate of domestic currency in terms of other currencies is determined by the dynamics of ... Read More
Causes of disequilibrium in the balance of payment.
Importation of expensive manufactured goods such as cars that increase foreign exchange expenditure Low output /limited industrialization leading to low export volumes Exportation of primary ... Read More
Factors that give rise to cyclical unemployment
Decrease in income Fall in investment Decline in prices Reduction in government expenditure Reduction in exports pandemics such as covid-19 Read More
Cyclical unemployment
Cyclical unemployment is a temporary type unemployment that occurs due shortage in aggregate demand, during depression or recession phase of a trade cycle. Cyclical ... Read More
Factors which determine the demand for labour in an economy
The degree of sustainability of labour Elasticity of demand of labour The number of productive firms Non-pecuniary reward The prevailing economic climate The level of ... Read More
State problems which result from localization of industries
Pollution and noise Rural urban migration Traffic congestion Undeveloped rural area Demand pull inflation due to shortage of output Sanitation problems Increased pressure on existing ... Read More
Merits/advantages of technological transfer in the development process.
Creation of employment Production of better quality products Increased foreign exchange earning Increased profitability/efficiency Development of skills Socio-cultural transformation Facilitates exploitation of resources Improvement of ... Read More
Limitations of using per capita income in measuring standards of Living/reasons why high income per capita may not necessarily imply high standard of living
Per capita income does not reveal the nature of distribution of income. Per capita income figures may be high when there is high degree of ... Read More
How to calculate per capita income
Per capita income = GNP/total population Read More
What is meant by economic rent
Economic rent is the additional reward/payment over and above what is required to keep a factor of production in its present use or it a ... Read More
Commercial rent
Commercial rent is the payment for hiring/using a durable asset or property. Read More