What's it: The household sector includes individuals or groups of individuals. A household may consist of one or several people who live in the same household and share food. They may include one family or another group of people.On the one
Economic Context
What is the difference between a movement and a shift in the demand curve?
The difference between a movement and a shift in the demand curve lies in the causing factors. The first occurs due to changes in its price. The second occurs due to changes in non-price factors such as consumer income, future price expectations, or
Reasons For a Downward-Sloping Demand Curve
A downward-sloping demand curve holds true in most of our day-to-day cases. It shows a negative relationship between price and quantity demanded. It complies with the law of demand.By the law of demand, a higher price lowers consumers'
What Are the Five Exceptions to the Law of Demand?
While it applies to most things we encounter daily, there are exceptions to the law of demand. Two of them are Veblen goods and Giffen goods. They show a positive relationship between their price and the quantity demanded by consumers.In some
Three Assumptions Underlying the Law of Demand
The three reasons or assumptions underlying the law of demand are the income effect, the substitution effect, and diminishing marginal utility. The first two describe how consumers react when the price of a product changes. The income effect relates
Why Factories Move Out? Factors Causing Deindustrialization
Factors causing deindustrialization occurred due to higher manufacturing productivity, pushing prices and job absorption to continue to fall. The change in the economic structure from a manufacturing-based to a service-based basis has become a
Positive and Negative Impacts of Deindustrialization on Jobs, Environment & Growth
Deindustrialization has both positive and negative impacts. First, it could increase living standards, so consumers spend more dollars on services. Second, the reduced reduction in environmental degradation is an example of its positive
Individual Demand: Definition, Its Curve, Determinants
What's it: Individual demand represents the quantity demanded by a person for a good at a given price level. Two conditions: he has the willingness to buy and has the ability to buy.At different price levels, the quantity demanded is also
What are the six non-price determinants of demand? Examples.
When we study demand theory, non-price determinants of demand refer to factors other than the price of the goods we study, where their changes can affect demand. Knowing them is important because they are not described from the model. They are
Wants: Definition and Examples
What's it: Wants are hopes to have or fulfill something. If we want something, we expect to be able to buy it and have it. It's a felt need shaped by our knowledge, culture, personality, marketing, and preferences.Unlike needs, wants are
Needs: Definition, Example, Type
What's it: Needs means requiring something because it is essential. For example, we need food, water, and shelter to sustain our survival. Without food, for example, we can die.In the introduction to economics, we will find economists
4 Types of Capital in Economics and Business
There are several types of capital in economics and business. Some contribute directly and are used to produce goods and services. Meanwhile, others contribute indirectly. And, here, we discuss four of them:Physical capitalFinancial capitalHuman